Published on Jan 3, 2014 We’ve given you some reasons here as to why 2013 was a big year for eDiscovery, especially on issues such as predictive coding, cost shifting, and sanctions. Today, we look at some of the recent developments in the world of ESI and eDiscovery to highlight four likely trends in 2014.
The Firms Strike Back, or Back Down
Prediction: Law firms that have already made large investments into ESI technology will double down, while other law firms will exit the eDiscovery technology business.
Last year saw the rise of the vendors. As a result, this year we expect firms to reevaluate and determine their long-term strategies for eDiscovery and ESI services. Increasingly, general counsel have been going straight to vendors for their eDiscovery services rather than relying on outside counseling order to attain greater flexibility and transparency when managing their discovery. The roles of inside counsel, outside counsel and vendors were discussed heavily at the Advanced eDiscovery Institute and in recent articles.
Most law firms that do “in house” e-Discovery work rely on off-the-shelf third party platforms; in other words, they are a reseller for a vendor. They also often directly coordinate document reviews through attorney staffing agencies, and then firm attorneys manage and operate all aspects of the review. However, proprietary vendors can provide their own platforms at lower cost than reseller firms, keep them more up to date, and operate their own technology more efficiently than firms. To keep e-Discovery costs down for their clients, expect many of these firms to refocus on their core services and rely on vendors for e-Discovery needs.
However, a few firms have already developed or acquired proprietary ESI technology. Some firms also have added an ancillary business that includes large document review facilities and large numbers of low-cost document reviewers. We can expect these firms to continue to expand their ESI practices and acquire more technologies to win back revenue streams lost to vendors. Firms already doubling down include WilmerHale’s business services center in Dayton and its use of proprietary e-discovery software; Weil Gotchal, which has invested in its own technology-assisted review platform; and Reed Smith, which boasts a staff of specialized eDiscovery attorneys and heavy investment into partnered ESI hosting and review tools.
Questions still surround whether these firms’ own ESI platforms will be able to compete with vendors’ offerings. In terms of technology, ESI vendors are continually updating their technologies and looking for ways to speed up their processes while making them less expensive. Companies like Driven have expanded internationally and run 24 hours a day, offer immediate solutions for anytime problems and constantly monitor and adjust their technology. Although many are already international law firms, the question will be whether they are willing to make the type of commitment to keep up with vendors, both in terms of operational and developmental resources. The only thing certain is that the battle for ESI dollars will only get hotter in 2014.
Cooperation in Every Aspect
Prediction: Courts will more assertively “call out” parties for not cooperating, and parties will finally start to “get it.”
The judicial groundswell for cooperation in eDiscovery shows no sign of letting up in 2014, and was made clear by recent court opinions, the proposed changes to the Federal Rules of Civil Procedure, and judge’s discussions at e-Discovery events. Despite the growing number of cases in which courts have chastising parties for failing to cooperate (see, e.g.Ruiz-Bueno, III v. Scott, No. 2:12-cv-0809, 2013 WL 6055402 (S.D. Ohio Nov. 15, 2013)), parties in many cases still don’t seem to “get it.” Therefore, expect the courts to increasingly amplify their message until they see true cooperation.
The Sedona Conference continues to be at the forefront of ESI and eDiscovery thought. The Conference’s Cooperation Proclamation and other publications continue to be the gold standard for ESI and are increasingly cited by courts. Judge Nolan’s order in Kleeen Products v. Packaging Corp of America started with a quote from the proclamation, and recent case law, although some not citing the proclamation directly, have followed it’s lead. Last year judges in ProconGPS, Inc. v. Skypatrol, LLC, No. C 11-3975 (N.D. Cal. Apr. 1, 2013) and Ruiz admonished the lack of, and drew a roadmap for future, cooperation by the parties. In Ruiz, an opinion that was widely discussed for allowing plaintiffs motion for discovery about discovery, Judge Kemp noted in an “[a]dditional [o]bservations” section that “the relationship between counsel in th[e] case was not what it should be,” the “document retrieval process [should] be addressed cooperatively” and if counsels were unable to “the Court w[ould] reluctantly consider whether sanctions [were] needed in order to force the type of cooperation which the Rules of Civil Procedure require.“ In ProconGPS Judge Illston, citing litigants penchant’s for calling foul on one another for inadequate document production, and the “appear[ance] that the parties ha[d] not engaged in a meaningful meet and confer process with regard to ESI production” found “that the most efficient solution [was] for counsel . . . to engage in an in-person meet and confer regarding all outstanding ESI production issues.”
At the Georgetown Advanced eDiscovery Institute, the judges in attendance made it clear they were and are not afraid to send attorneys into the jury room to hash out eDiscovery disputes. Judge Scheindlin and Judge Conti agreed the proposed FRCP Rule 1, (which adds “parties” to those that should employ the rules to “secure the just, speedy, and inexpensive determination in every action and proceeding,” in the hope to add more cooperation) probably would not change much in practice, and although Judge Schiendlin tried to forward the discussion, stating that “no one cares (about Rule 1),” Judge Conti noted that he could see it as a basis for sanctioning a party. This year, look for a growing number of judges, to embrace cooperation in their opinions and orders, and in the event of disagreements, send litigants off to hash things out on their own under the threat of sanctions.
Changes to the FRCP
Prediction: Parties pay closer attention to their discovery obligations as a result of attention on FRCP changes.
The comment period for the proposed changes to the Federal Rules of Civil Procedure is closing on February 16. As of now there are 386 different comments [update at time of publication], and along with Rule 37(previously discussed in the 2013 trends article), Rule 26 has sparked considerable debate. The proposed change to Rule 26 would redefine the scope of discovery. Currently Rule 26(b) permits discovery of any information that is relevant to a party’s claim or defense and, for good cause shown, the subject matter of the action. The proposed Rule 26(b) retains the former and disposes of the latter provision of the rule. However the proposed rule adds the proportionality factors from Rule 26(b)(2)(C)(iii) to the former provision of Rule 26(b). Those factors are now incorporated into the scope from the beginning of discovery, and without the need for a court order, as currently needed.
Proponents of the proposed Rule 26 charge that limiting the scope of discovery is long overdue and cite the need to rein in document productions and soaring costs. Although large corporations, defense bars, and the chamber of commerce all laud the rule makers efforts in their comments, and agree the proposed amendments are a step in the right direction, they universally criticize the rules for not going far enough and feel that a materiality requirement is needed to truly combat overbroad discovery and it’s associated costs. These commenters would like to see the proposed amendments to Rule 26 read “information relevant and material to a parties claim or defense.” They argue that the addition of a materiality standard is needed to combat costs and limit discovery to the information that is genuinely important to the case.
Opponents of the proposed changes argue that the new Rule 26 will place another obstacle in the path of plaintiffs before they are able to receive a review on the merits. They feel the proposed changes, following recent Supreme Court decisions (such as Iqbal and Twombly which heightened the pleading standard) severely tip the scales of justice in favor of defendants, are a draconian solution to a problem that plagues a minute number of cases, and will spawn more litigation about discovery and proportionality. They argue that the high costs of discovery in the cases complained about by the defense bar are due to the adversarial nature of the system and the defense bar, and those costs could be lowered if the defense bar would embrace cooperation. Additionally, critics, including Judge Scheindlin, caution that by shifting the burden to the plaintiff at the beginning of discovery to show the productions sought are not unduly burdensome, plaintiffs will have to make a showing without having knowledge of what the evidence may be.
The comment period closes in February, but it is possible that this round of comments is merely a prelude to more rounds of revisions and comments. As the FRCP debate rages on, expect parties to pay even closer attention to their discovery disputes and obligations. Additionally, and Regardless of, if the proposed rules are adopted, expect these debates about discovery and it’s associated costs to continue in perpetuity.
Model Orders
Prediction: Coming soon to your home court: e-Discovery model orders (if you don’t have one already)
To reduce eDiscovery disputes, courts from Maryland to California and in between have been issuing eDiscovery checklists, guidelines and orders. This year expect the trend to continue. Most orders provide for discussions on the format, preservation, manner of production and search of ESI. The recently adopted Eastern District of Michigan ESI model order builds on those principles, is forward looking and can be used to highlight some of the trends expected to be followed, and issues to be avoided in an anticipated new wave of model orders.
The Michigan order leaves room for advancement in eDiscovery and ESI technologies. The order directs litigants to discuss the methodologies for production of ESI, and that the process can be done using keyword searching, topic or concept clustering or “other advanced culling technologies.” Additionally, the order makes available discovery about discovery, an issue that could become commonplace in courts reviewing TAR productions. Some older orders fail to account for upcoming technologies or TAR by including language that limits the number of search terms, leaving no room in their interpretation for advanced or future technologies. With the anticipated rise of TAR, some model orders language will quickly become antiquated and need to be revised.
The Michigan order tries to limit the cost of eDiscovery. The order places presumptive limits on the number of custodians that responding parties will be required to search, limits the age of responsive documents to 5 years before the filing of the lawsuit and searches for ESI to 160 hours. Although some may argue about initially limiting discovery, the flexibility in these provisions provides that litigants can obtain additional discovery with a court order. The cost saving provisions placing presumptive limits on eDiscovery could be replicated in this year’s new orders.
The Michigan order, with its forward looking drafting, could serve as a useful guide to those drafting the orders we expect to see out later this year.
Obviously it is going to be a big year in the ESI and eDiscovery ecosphere, TAR, the new uses of big data, and the other debates circling around the proposed changes to the FRCP were not even discussed in this article. So get ready for 2014 and the trends cited above.
