What Judges are really saying about Technology Assisted Review

Since the first judicial opinion endorsing the use of Technology Assisted Review (or TAR) was written by Judge Andrew J. Peck in 2012, an entire legal industry has grown up on the premise of streamlining the document review process in discovery – that is, taking a repetitive task traditionally performed entirely by attorneys and introducing the concept of computer assistance to increase efficiency and improve consistency. And while some of the marketing efforts surrounding TAR make it seem TAR can replace attorney review wholesale, some attorneys considering the use of TAR in litigation or in response to regulatory inquiries are more focused on ignoring the “buzz” and instead have zeroed in on what judges have actually said (and held) regarding TAR.

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Social Media Privacy Settings May Not Protect Your Information From Discovery

Users of social media are likely familiar with privacy settings, and understand that setting their profiles to “private” ensures that people who are not friends, connections or followers cannot view their information and postings. However, it is equally likely that most social media users have not considered whether those privacy settings protect their information from production in litigation. The Court of Appeals of New York recently considered the issue.

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What Controls: The Location of the Data or the Location of the Searches for the Data?

The U.S. Supreme Court recently heard oral arguments in U.S. v. Microsoft, tackling the question of whether an organization can refuse to disclose foreign-stored data sought by the U.S. government through domestic warrants. Currently, the Second Circuit says yes while other circuits tend to say no.

While several district courts have concluded that it is not an extraterritorial seizure to enforce warrants that require organizations to produce U.S. users’ account data stored in foreign servers, these decisions conflict with precedent from the Second Circuit Court of Appeals. The Second Circuit held that Microsoft could not be compelled to comply with a warrant if it meant producing foreign-stored data for use in a domestic case. Elsewhere in the United States, judges have rejected the Second Circuit’s decision, ordering the production of foreign-stored data pursuant to domestic warrants. These decisions follow the reasoning that a court can order the production of anything that can be accessed and delivered within the United States. Accordingly, no relevant extraterritoriality concerns are implicated despite the storage of data in a foreign location. Outside of the Second Circuit, it is clear that courts are focusing on where the access to and disclosure of the stored data occurs (domestically) rather than the location of the data (internationally). Conversely, the Second Circuit’s Microsoft decision focuses on the seizure of the data from a foreign location, which is where it locates the privacy violations and applies its extraterritoriality analysis.

Legislation could fix the differing interpretations, but despite near universal agreement that the Electronic Communications Privacy Act of 1986 needs to be updated and the repeated introduction of new legislation, Congress has been slow to act. Thus, both parties urged the Supreme Court to clarify the law during oral arguments in U.S. v. Microsoft, which focused on whether the search, retrieval, and disclosure of foreign-stored data constituted an extraterritorial act, and if so, how the law should apply. Continue Reading

E-Discovery and Cryptocurrencies – What you need to know

Does bitcoin keep appearing in your news feed?

As cryptocurrencies become adopted and accepted by mainstream vendors and consumers, it’s a good idea for attorneys to think about the potential litigation and eDiscovery challenges ahead. While U.S.-based cryptocurrency exchanges are subject to Bank Secrecy laws and anti-money laundering provisions, regulation and enforcement still lag, leaving the door open for manipulation, fraud and litigation.

This past fall, Bitcoin, the most popular cryptocurrency, experienced a massive run on its price –doubling in value within a two week span and ultimately reaching an all-time high of $19,205 per coin before falling sharply (just last February, Bitcoin traded at $902 per coin). Because of its volatile trading nature, and its lack of protections for investors, regulators and high end investment houses are skeptical of Bitcoin’s value and have been reluctant to encourage the cryptocurrency markets, deeming them a speculative investment.

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Perfection Not Required in Technology Assisted Review, but Transparency Might Be

A recent discovery order in a Southern District of New York public housing lottery discrimination case supported the use of technology assisted review (TAR) but required additional transparency, providing another view into how judges will consider the use of advanced analytics in litigation. In Winfield v. City of New York, Magistrate Judge Katharine H. Parker ordered limited transparency (and encouraged even greater transparency) regarding the defendant’s use of TAR after examining their process in camera. Ultimately, Judge Parker found that the defendant’s process was essentially accurate and reliable, although the defendant’s process was not without its own flaws.

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Why Aren’t You Using FRE 502(d)

FRE 502(d)In 2008, Federal Rule of Evidence 502(d) was signed and enacted into law by Congress to minimize the cost of civil litigation, particularly in matters with large volumes of ESI. The intent of the rule is to allow parties to produce large volumes of documents while reducing the risk of waiving privilege in a federal proceeding. The rule states:

Controlling Effect of a Court Order. A federal court may order that the privilege or protection is not waived by disclosure connected with the litigation pending before the court — in which event the disclosure is also not a waiver in any other federal or state proceeding.

Rule 502(d) gives heightened protection against waiver in instances where privileged information is both knowingly and/or unknowingly disclosed. In the case of the latter, the rule eliminates the need to demonstrate that the disclosing party took reasonable steps to prevent the disclosure, which is part of the requirements of Rule 502(b) under its “inadvertent production” standard. Accordingly, 502(d) eliminates costly and time-consuming potential motion practice regarding waivers of privilege where the issue of whether the production was inadvertent is disputed. Moreover, that protection carries over to any other proceeding in federal or state court even with different parties. Litigants should consider it a safety net protecting against waiver of privilege.

FRE 502(d) is not often used

Despite the inherent strengths of Rule 502(d), most litigants continue to ignore it.  U.S. Magistrate Judge Andrew Peck posits that perhaps the most obvious explanation for Rule 502(d)’s infrequent use is that lawyers simply aren’t aware of its provisions (see Judge Peck’s recent insights on 502(d)).

Alternatively, what might be causing some reticence among attorneys is a concern that pursuing a 502(d) order could give the court a green light to require a massive document production without conducting a thorough privilege review. Litigants, however, can protect themselves from such a scenario by crafting language within the order that outlines the scope of the privilege review and associated rights of the parties.

To address the aforementioned concerns, Judge Peck provides a simple model on his website that can be tailored to suit your specific matter:

  1. The production of privileged or work-product protected documents, electronically stored information (“ESI”) or information, whether inadvertent or otherwise, is not a waiver of the privilege or protection from discovery in this case or in any other federal or state proceeding. This Order shall be interpreted to provide the maximum protection allowed by Federal Rule of Evidence 502(d).
  2. Nothing contained herein is intended to or shall serve to limit a party’s right to conduct a review of documents, ESI or information (including metadata) for relevance, responsiveness and/or segregation of privileged and/or protected information before production.

Even in the unlikely event that a court compels a party to produce documents without conducting a careful privilege review, Judge Peck is of the opinion that it would be improper to do so, stating that a court should not infringe upon attorneys’ rights to protect their clients’ privileged documents for the sake of speed or cost.

Quick considerations when drafting a 502(d) order

1. Avoid confusion regarding what 502 standard should be applied.

Rule 502(b) requires an analysis that the producing party took reasonable steps to prevent disclosure — a standard not required by Rule 502(d). Given that, parties should draft language explicitly stating that an analysis considering Rule 502(b) is inapplicable (see paragraph 1 of Judge Peck’s model).

2. Be careful with the use of the term “inadvertent.”

In fact, avoid the use of the term “inadvertent” entirely. Use of the term only clouds the intent of the 502(d) order and puts the parties at risk of disputing what the term actually means.

Litigants should refer to the unconditional claw-back language of Rule 502(d). The point of drafting a 502(d) order is to avoid a Rule 502(b) “reasonable steps” analysis and to prevent prolonged and costly disputes regarding waiver of privilege.

3. 502(d) provides insurance even with purposeful disclosure.

Parties may wish to purposefully disclose privileged documents or data in a current proceeding, but may be concerned about a waiver or privilege in a future proceeding. The protection of a Rule 502(d) can carry over to any other proceeding in federal or state court with different parties, thus protecting parties even where there was a purposeful disclosure of privileged documents.

Consider using a Rule 502(d) order. It is an incredibly useful tool to protect against waiver in instances where privileged information is both knowingly and/or unknowingly disclosed.

It’s the End of Authentication (of ESI) as We Know It

Amendments to Federal Rules of Evidence 803 and 902 will become effective on Dec. 1 and will “govern in all proceedings thereafter commenced and, insofar as just, all proceedings then pending.”

We previously analyzed the changes to the hearsay exception for ancient documents (FRE 803(16)), and here focus on amendments concerning the self-authentication of evidence generated by electronic processes or systems (FRE 902(13)) and self-authentication of data copied from an electronic device, storage medium or file (902(14)). In short:

  • The intent of these amendments is to streamline authentication of electronic evidence through pretrial certification processes intended to minimize the need for testimony by a foundation witness.
  • A party seeking to take advantage of these procedures must ensure that its processes for preservation, collection, processing and production of electronically stored information (ESI), and for tracking the chain of custody of such information, enables the party to make the certification envisioned by the amendments (a certification that may post-date those actions by months or even years in complex litigation).
  • These amendments do not prevent the parties from stipulating to authenticity, even without a certification. Nevertheless, they may incentivize parties to more aggressively challenge authenticity where it is apparent that an opponent is unable to make the pretrial certification envisioned by the amendments.
  • These amendments focus on authenticity only, and a proponent of the evidence must still be prepared to overcome other hurdles to admissibility, including hearsay and relevance.

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Cost Shifting Ordered Due to Inadequate Meet and Confer

Discovery is not about gamesmanship, and parties are expected to engage in meaningful negotiation about the terms of discovery agreements. That is the message from Judge A. Kathleen Tomlinson of the Eastern District of New York, who recently ordered cost shifting when parties failed to meaningfully meet and confer about their electronically stored information (ESI) agreement. The decision is remarkable, because it orders cost shifting in a case where there is no claim that the discovery sought is unreasonable in scope or unnecessary to resolve the claims in the dispute. The court did not analyze and weigh the proportionality factors in Rule 26, which might have resulted in a more nuanced ruling. While serving as a valuable reminder of the importance of meet and confers in the discovery process, the decision sets a potentially dangerous precedent that parties who object to the expense of discovery that is completely reasonable in scope and necessary to resolve matters in dispute can still shift the cost of that discovery to their adversaries.

In Bailey v. Brookdale University Hospital, a single-plaintiff employment litigation, Mr. Bailey claimed he should not have to bear the burdensome cost of production despite a negotiated, executed, and ordered ESI agreement between the parties. Judge Tomlinson concluded that cost shifting was appropriate in this case, because the ESI agreement was not meaningfully negotiated, resulting in an agreement that was inappropriate for the litigation. Continue Reading

E-Discovery Standards and the 26(g) Signature That Drives the Market

We begin with three quick questions:

1. Which legal practice has created and fueled a multibillion-dollar support industry?

2. Which legal practice employs incomprehensible acronyms that require a glossary apart from Black’s Law Dictionary?

3. Which legal practice motivates debates between non-lawyer computer scientists and academics?

If you guessed e-discovery (perhaps because you’re reading an e-discovery post with an e-discovery title on an e-discovery blog), you’re right. And because of the spend associated with this practice, standards might be expected, assuming consensus and agreement within the e-discovery space.

But agreement is especially difficult in e-discovery because of this choice of standards direction: Should they be technology-based in an environment where technologies change rapidly? Or should standards focus on the process used by attorneys who must certify their discovery responses under Federal Rule of Civil Procedure 26(g), but who are less-than-embracing of advice from nonpractitioners, scholars and academics, and litigation support professionals? In the absence of consensus, standards have thus far languished, and there is currently no clear-cut direction in the market.

There is still merit in considering standards for e-discovery as a practice, despite the requirement for attorney sign-off, because e-discovery is a highly technical practice that is only becoming more so. The value of this consideration (and other topics) are addressed in Perspectives on Predictive Coding and Other Advanced Search Methods for the Legal Practitioner, where the authors contributing chapters confronted the challenge of modernity and the understanding that the present-day “legal profession lives and breathes in a world of electronically stored information.”

While we have examined technology assisted review (TAR) and defense of process in the context of specific cases before, in our Perspectives chapter, “A Modest Proposal for Preventing e-Discovery Standards from Being a Burden to Practitioners, Clients, the Courts, or Common Sense,” we took a holistic look at the possible standardization of present and future e-discovery practice in all cases. We also discussed whether technical standards would even be applicable, provided some additional guidance for practitioners within this space, and looked to the future of e-discovery and practice more generally. This discussion began with the present-day “patchwork of ‘best practices’ that has emerged from think tanks, regional judicial pilot projects, and individual judges,” leading us to consider whether standardization was even “possible in the context of procedural rules administered by courts relating to known and not-yet-knowable technological challenges.” In working through this question, we examined standard-setting bodies and their work product, parsing out the reasonable from the unreasonable, and offered a proposal of our own.

Again, standard-setting bodies are not without merit in the e-discovery space, and at the very least may provide a worthwhile checklist for those practitioners signing on the 26(g) line. In general, and as we discuss in the chapter, new e-discovery practitioners and veterans alike should be familiar with the following:

After our review and explanation of these and related resources, we offered a checklist set of 10 standard practices, bookended by two “new” considerations for long-time zealous advocates, cooperation and transparency. In particular, we asserted that cooperation was not simply “refraining from abusive practices, but also developing, testing, and agreeing on the nature and scope of information sought (to the extent consistent with clients’ interests).” We also noted that “true cooperation [might] require the use of true expert cooperation, where both parties have experts representing their interests.” For transparency, we considered recent case law that noted that practitioners should be prepared to provide full disclosure about the technology used, the process and the methodology, including those “documents used to ‘train’ the computer” in instances of TAR.

In sum, our proposed checklist focuses on the 26(g) practitioner, but incorporates principles more common to those branches of science and practice that rely on working in concert toward a common goal—in this case, the discovery practices required under the rest of the federal rules.

Attorneys’ Professional Duty of Care When Representing Clients in Litigation or an Investigation Requires Higher Technological Literacy

The legal practice and technology go hand in hand, and a solid understanding of technology is crucial to satisfy the ethical duties owed by attorneys to their clients. In an opinion published on Feb. 21, the New York County Lawyers Association Professional Ethics Committee (the “Committee”) stressed that the legal practice needs to keep up with technology and that the duty of competence is evolving as technology advances and integrates with the practice. Therefore, attorneys should possess a higher level of technological literacy in order to provide skillful representation and adequate service to their clients.

The notion by which an attorney is required to familiarize herself with clients’ IT systems and data retention practices isn’t new; it is embedded within the Federal Rules of Civil Procedure, various local rules and rules of professional conduct, and in numerous court decisions (such as the notable Zubulake v. UBS Warburg LLC, 229 F.R.D. 422 (S.D.N.Y. 2004)); however, the Committee’s decision takes it one step further to determine that the duty of competence does not stop there. Attorneys need to be versed in clients’ IT environments, but also adhere to a higher standard of competence and possess “sufficient understanding of issues relating to securing, transmitting, and producing electronically stored information” in order to protect clients’ confidential information from cybersecurity risk. Continue Reading