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2012 was a milestone year for Technology-Assisted Review (TAR), featuring the first judicial opinions expressly supporting its use by producing parties in litigation. Naturally, there has been a lot of excitement among vendors and e-discovery lawyers. But, despite these historic decisions, there remains little case law addressing how a producing party can use TAR and meet its discovery obligations. The technologies are just starting to be better understood by lawyers and courts (as this author has previously written). As a result, there is a dearth of guidance on best practices in this nascent legal arena.

Not surprisingly, the first few cases addressing TAR have cautiously embraced its use. These decisions collectively promote a high level of cooperation and transparency, including the involvement of opposing counsel in training the system and the sharing of the set of documents used to train the system (referred to as the seed set). The concern among some TAR advocates is that these practices exceed what is required under the Federal Rules of Civil Procedure and that, if these levels of transparency come to represent the minimum legal threshold of cooperation for using TAR, producing parties will be dissuaded from using TAR as a result of the added costs and litigation risks.
Continue Reading Predictive Coding: How Much Transparency and Cooperation Is Required When Using Technology Assisted Review In Litigation?

While spoliation sanctions are increasingly common in civil litigation, it is rare for such conduct to be charged as criminal obstruction of justice. But in an indictment unveiled last week, the Department of Justice did just that. In a trade secrets theft case, DOJ charged the defendant, Kolon Industries, Inc., with obstruction of justice, in

On October 5, 2012, the U.S. International Trade Commission (ITC) published proposed amendments to its rules of procedure that would limit e-discovery and provide guidance regarding the assertion of privilege claims in Section 337 proceedings. The goal of the proposed amendments “is to reduce expensive, inefficient, unjustified, or unnecessary discovery practices in agency proceedings while preserving the opportunity for fair and efficient discovery for all parties.” Based largely upon Rule 26 of the Federal Rules of Civil Procedure, the proposed amendments (1) provide specific limitations on the discovery of electronically stored information that is not reasonably accessible due to undue burden or cost, is duplicative or can be obtained from a less burdensome source, or where the burden of discovery outweighs its likely benefits; and (2) require the production of a privilege log with specified categories of information, set forth a procedure for promptly resolving privilege disputes, and allow parties to enter into agreements regarding the inadvertent production of privileged information. 

The ITC is proposing changes to Section 210.27 of its rules of procedure (19 CFR Part 210) to address concerns regarding the large volumes of electronically stored information (ESI) often produced in Section 337 proceedings. In July 2011, The George Washington University Law School held a conference on this issue, and many participants expressed frustration that parties in Section 337 matters often have to search and produce vast amounts of ESI, particularly email, but that only a tiny fraction of that volume will ever be admitted into the record. The potential for “gaming” the process whereby the costs of unnecessarily broad discovery either discourage parties from bringing complaints or disproportionately influence settlement decisions was identified as a major concern. The Commission also focused on the increased risk of inadvertent disclosure of attorney-client privileged information or attorney work product due to the inherent nature of ESI and the modern technologies and methods used to process and produce such information in discovery. 
Continue Reading ITC Publishes Proposed Rules to Limit E-Discovery and Address Privilege Issues

On September 27, 2012, the Federal Trade Commission published final revisions to the Commission’s Rules of Practice governing its investigatory process (16 CFR Part 2) and attorney discipline (16 CFR Part 4). Spurred in large part by the challenges posed by discovery of electronically stored information, the Commission explained that the final rules will “update and improve the Commission’s Part 2 investigation process by accounting for and incorporating modern discovery methods, facilitating the enforcement of Commission compulsory process, and generally increasing efficiency and cooperation.” After the Commission published its proposed revisions on January 23, 2012, a number of individuals and organizations, including Crowell & Moring, submitted public comments regarding the FTC’s proposed amendments. While the Commission adopted the bulk of the proposed rules changes without modification, it agreed that “some of the proposed rules can be modified to better reduce the burdens of the Part 2 process without sacrificing the quality of the investigation.” Accordingly, the Commission’s modifications to the proposed rules include (1) a revision of the privilege log specifications to decrease the burden on respondents, while still accounting for staff’s need to effectively evaluate privilege claims; (2) extending the deadline for the first meet and confer to decrease the burden on recipients of process and their counsel; and (3) implementing a “safety valve” provision allowing parties showing good cause to file a petition to limit or quash before any meet and confer has taken place.

Revisions to Proposed Rules Based on Public Comments

The original proposed amendments required additional detailed and specific information for withheld privileged material to be provided on a privilege log, which must be attested by the lead or supervising attorney responsible for asserting the privilege claims [Rule 2.11(a)]. This amendment largely was adopted as proposed, but the staff responded to certain concerns raised by commenters in the final rule by permitting respondents to (1) append a legend to the log enabling them to more conveniently identify the titles, addresses, and affiliations of authors, recipients, and persons copied on privileged material; (2) more conveniently identify authors or recipients acting in their capacity as attorneys by identifying them with an asterisk on a privilege log; and (3) forego providing the number of pages or bytes of a withheld document, and instead provide document control numbers.
Continue Reading FTC Finalizes Changes to Rules Governing Investigatory Procedures, Primarily to Address Issues Regarding Electronically Stored Information

In a ruling that could have a widespread impact on the employment law landscape, the U.S. District Court for the Southern District of New York recently ruled that KPMG LLP, defendant in a suit alleging FLSA and NY state class action claims, is required to preserve electronically stored information relating to all potential plaintiffs, at least until class membership is settled. While the district court’s decision in Pippins v. KPMG may provide some relief from the more onerous requirements of the magistrate judge’s earlier ruling, the decision still represents an expansive view of e-discovery preservation requirements in the employment class action context.

In Pippins, KPMG was faced with a potential FLSA class of 2,500 members, and a smaller number of putative New York state class members.  KPMG presented evidence that the cost of retaining hard drives for the entire putative class would exceed $1.5 million.  It appears that the parties had made efforts to meet and confer in an effort to limit KPMG’s preservation obligation to some reasonable sample of the putative class members’ hard drives, but they were unsuccessful because KPMG would not agree to plaintiffs’ request to hand over five random hard drives in their entirety for inspection and review by plaintiffs’ counsel.  Instead, KPMG proposed to limit their preservation obligation to approximately 100 putative class members’ hard drives.  Having reached an impasse, KPMG moved for a protective order pursuant to FRCP 26(c). The issue was “whether KPMG must preserve computer hard drives for thousands of former employees who fall within a potential nationwide FLSA collective and/or a putative New York State class, or whether random sampling of a small number of hard drives would be sufficient to fulfill KPMG’s preservation obligations.”
Continue Reading Federal Court Imposes Broad Preservation Obligation Regarding Potential Class Members in FLSA Action

On January 13, 2012, the Federal Trade Commission announced a number of proposed changes to Parts 2 and 4 of the Commission’s Rules of Practice governing its investigatory process, “[e]specially in response to growing reliance upon and use of electronic media in document discovery.”  Given the challenges posed by the routine discovery of large, non-uniform, broadly dispersed volumes of electronically stored information (“ESI”), the Commission expressed its interest in making its “procedures more efficient and less burdensome for all parties.”  It claims the proposed changes will “expedite investigatory processes” and “keep pace with technology.”

In many ways, the recognized need for reform of the Commission’s investigatory process is likely welcomed by lawyers and parties involved in Commission investigations.  For example, some may argue that the Commission historically has been hesitant to recognize the effectiveness and efficiencies that can result from advanced technologies used in modern e-discovery.  The introduction to the proposed Rules, however, states that “searches, identification, and collection all require special skills and, if done properly, may utilize one or more search tools such as advanced key word searches, Boolean connectors, Bayesian logic, concept searches, predictive coding, and other advanced analytics.”  Nevertheless, the proposed Rules create additional requirements with which practitioners and parties before the Commission should familiarize themselves.  Some of these may impose substantial risk and burdens.
Continue Reading FTC Proposes Changes to Rules Governing Investigatory Procedures, Primarily to Address Issues Regarding Electronically Stored Information