Webcast Slides--Gibson Dunn 2012 Year-End Report and Hot Topics

Current E-Discovery Hot Topics and
2012 Year-End E-Discovery Report
Moving Beyond Sanctions and Toward Solutions to Difficult
Problems
March 7, 2013

<Presentation Title/Client Name>
2
2012: Year In Review
• Less attention to:
– Sanctions
• More attention to:
– Predictive coding
– International e-discovery
– Cooperation
– Social networking
• A sign of things to come?

Sanctions
Jenna Musselman Yott
3

4
Sanctions
Less Dramatic, More Pragmatic, But Still Troubling
• No major dramatic opinions in 2012 like those seen
in prior years
• Still a significant threat hanging over litigants and
counsel
– Sanctions awarded in 69 of the 120 cases found
where sanctions were sought (57.5%)
– Similar rate (though fewer in number) when
compared to 2011 (sanctions granted in 90 of 150
cases, or 60%)

5
Sanctions
44
20
10
5
14
0
5
10
15
20
25
30
35
40
45
50
Monetary Adverse
Inference
Evidence
Preclusion
Terminating Other
Type and Percentage of Reported Cases Where Sanctions Granted
(January 1 –December 31, 2012)

6
Sanctions
• Monetary Sanctions still most common
– e.g., fees and costs
• Adverse Inference & Evidence Preclusion
– right to impose often “reserved” until entry of evidence
• Terminating Sanctions for egregious conduct
– e.g., willful destruction of evidence expected to be
relevant
• Other possibilities to fit specific situations
– e.g., reopening discovery or re-deposing witness

7
Sanctions
• Rambus cases reveal inconsistencies in different
courts’ treatment of similar conduct
• Micron v. Rambus (D. Delaware)
– January 3, 2013: case dispositive sanctions
imposed; patents declared unenforceable
• Hynix v. Rambus (N.D. California)
– September 21, 2012: validity of patents
recognized; spoliation punished with monetary
formula

Proposed Rule Reform
Catherine Brewer
8

9
• The cost and burden associated with discovery have resulted
in a recognition that changes need to be made to the Federal
Rules of Civil Procedure
• Three main themes guiding reform efforts of the Federal Rules
Civil Advisory Committee and the Discovery Subcommittee:
– Early, hands-on case management
– Cooperation
– Proportionality/Scope of Discovery
• Goal to present comprehensive discovery rule changes for
public comment later this year

10
• Proposed Change to Rule 37(e)
– Current Rule: “Absent exceptional circumstances, a court may not impose sanctions
under these rules on a party for failing to provide electronically stored information lost as a
result of the routine, good-faith operation of an electronic information system.”
– Proposed Rule:
• Absent a finding that the failure to preserve “irreparably deprived a party of any
meaningful opportunity to present a claim or defense” sanctions will only be justified
when the failure to preserve was willful or in bad faith and caused substantial prejudice
• Seeks to have a court rely on the Federal Rules as the basis for issuing sanctions, not the
court’s inherent power
• Sets forth five factors for a court to consider when evaluating if the failure to preserve
was willful or in bad faith: (1) notice of pending litigation/preservation duty; (2)
reasonableness of the party’s efforts to preserve; (3) was there a request to preserve and
good-faith consultation regarding the scope of preservation; (4) proportionality of
preservation to the scope of litigation; (5) did the preserving party seek timely guidance
from the court regarding preservation

11
• Additional changes being considered
– Early case management
• Promote early conferences with the court on discovery issues
• Potentially permit Rule 34 requests for production to be served before
Rule 26(f) conference
– Cooperation
• Amend Rule 1 to more clearly articulate goal of cooperation
– Proportionality
• Proposal to modify scope of discovery under Rule 26
• Potential inclusion of the concept of proportionality as part of Rule 26
• Presumptive limit to 15 interrogatories instead of 25
• Presumptive limit to 25 requests for admission (excluding document
authenticity) and 25 requests for production
• Presumptive limit of 5 depositions instead of 10 depositions with a
proposal to shorten the permitted length of depositions

Search Methodology
Colin Davis
12

13
Search Methodology
Has Predictive Coding’s Time Finally Come?
• Predictive Coding Terminology
– “Seed set”
– “Recall” vs. “precision”
– “Stabilization” / “iterative review”
• Five considerations from Da Silva Moore v. Publicis Groupe
SA, No. 11 Civ. 1279(ALC)(AJP), 2012 WL 607412, at *11
(S.D.N.Y Feb. 24, 2012)
– The parties’ agreement;
– The amount of ESI to be reviewed;
– The superiority of computer-assisted review to available
alternatives;
– The need for cost-effectiveness and proportionality; and
– The transparency of the process.

14
Search Methodology
Has Predictive Coding’s Time Finally Come?
• Predictive coding beyond Da Silva Moore
– Global Aerospace Inc. v. Landow Aviation, L.P., Consol. Case. No.
CL 61040 (Va. Cir. Ct. Apr. 23, 2012) (approving defendants’ use
of predictive coding without prejudice to plaintiffs’ raising an
issue as to the completeness of defendants’ production).
– Kleen Products LLC v. Packaging Corp. of America, Case No. 1:10-
cv-05711 (N.D. Ill. Mar. 28, 2012) (denying plaintiffs’ motion for
an order requiring defendants to use predictive coding).
– In Re: Actos (Pioglitazone) Prods. Liab. Litig., MDL No. 6:11-md-
2299 (W.D. La. July 27, 2012) (approving defendants’ use of
predictive coding pursuant to stipulated protocol).
– EORHB, Inc. v. HOA Holdings LLC, Civil Action No. 7409-VCL (Del.
Ch. Oct. 15, 2012) (sua sponte ordering the use of predictive
coding and a single discovery vendor).

15
Privilege
Waiver Is Such Sweet Sorrow
• Waiver battles under Federal Rule of Evidence 502(b)
– What are “reasonable efforts to prevent disclosure”?
– What are “reasonable efforts to rectify” an inadvertent disclosure?
• No fault “claw-back” orders under Federal Rule of Evidence 502(d)
– May allow parties “to conduct and respond to discovery expeditiously, without
the need for exhaustive pre-production privilege reviews, while still preserving
each party’s right to assert the privilege.’” Adair v. EQT Prod. Co., Nos.
1:10CV00037, 1:10CV00041, 2012 WL 2526982, at *5 (W.D. Va. June 29,
2012).
• Privilege and work computers
– Employees who have privileged communications on work computers, in
violation of employer policies, generally waive privilege because they have no
objectively reasonable expectation of confidentiality regarding those
communications. See, e.g., Chechele v. Ward, No. CIV-10-1286-M, 2012 WL
4481439 (W.D. Okla. Sept. 28, 2012).

Proportionality
Brooke M. Wallace
16

17
Proportionality
An Increasingly Important Principle
• Proportionality concept reflected in e-discovery pilot
projects, standing orders and proposed amendments
to the Federal Rules of Civil Procedures Rules
26 (scope of discovery) and 37 (sanctions)
• Sedona Conference® issued post-public comment
version of its Commentary on Proportionality in Jan.
2013
• Courts continue to engage in mediating discovery
disputes

18
Proportionality
The Sedona Conference® Commentary on Proportionality
• Sedona Principle One: The burdens and costs of
preserving potentially relevant information should be
weighed against the potential value and uniqueness
of the information when determining the
appropriate scope of preservation.
• Sedona Principle Four: Extrinsic information and
sampling may assist in the analysis of whether
requested discovery is sufficiently important to
warrant the burden and expense of its production.

19
Proportionality
Neither one size, nor one precedent, fits all
• Detailed assessment of benefit and cost are required
– Expert testimony can be helpful
• Overbroad discovery requests should not (and will
not) be enforced
• Cooperation and open communication with opposing
counsel is encouraged
– or required, in some courts

21
Preservation
Data Sources Proliferate While Case Law Provides Little Specific Guidance
• Companies facing challenges to preserve
ever-increasing number of data sources
• Cases continue to provide little guidance on this
issue
• Instead, major case law focuses over past year:
– Oral vs. written preservation notices
– Trigger for preservation obligations
– Post-notice follow-up obligations
– “Discovery about discovery”

22
Preservation
• Oral vs. written preservation notices
– Continued rejection of Pension Committee’s bright-line
rule (e.g., Chin)
– Recognition that oral holds may be appropriate in some
instances…
– …but in practice courts still very critical of oral holds
– Best practice: written preservation notice
• Trigger
– “Reasonably foreseeable” still the test
– Applies to plaintiffs as well as to defendants

23
Preservation
• Post-notice follow-up obligations
– Consensus that “mere circulation of a litigation hold is
insufficient . . . a party must take affirmative steps”
– Other than suspending autodeletion, little clarification of
what particular follow-up steps courts expect
– Some best practices have been developed (e.g., Sedona
commentary legal holds, Sedona principles)
• “Discovery about discovery”
– Court continue to shield information based on privilege…
– …but “growing trend among courts to find the attorney-
client privilege is lost when spoliation has occurred”

E-Discovery as a “Cost”
Heather L. Richardson
24

25
E-Discovery As A “Cost”
Statutory Background
• What are “costs” that may be awarded to a prevailing
party?
– Fed. R. Civ. Pro. 54(d)(1): “[C]osts... should be
allowed to the prevailing party”
– 28 U.S.C. 1920: including as a cost “fees for
exemplification and the costs of making copies.”
• What is “exemplification”? What is “making copies”?

26
Recouping vendor fees and other e-discovery charges as a prevailing party
• Race Tires America, Inc. v. Hoosier Racing Tire Corp.,
674 F.3d 158 (3d Cir. 2012)
– “Making copies” includes:
• Scanning
• File format conversion (native to TIFF)
• Converting VHS to DVD
– “Exemplification” does not include:
• Electronic vendor discovery work (including
keyword searches, preservation and collection)

27
Recouping vendor fees and other e-discovery charges as a prevailing party
• After Race Tires…
– Country Vintner of North Carolina v. E. & J. Gallo Winery,
Inc., No. 5:09-CV-326-BR, 2012 U.S. Dist. LEXIS 108905
(E.D. N.C. Aug. 3, 2012)
– Johnson v. Allstate Ins. Co., No. 07-cv-0781-SCW, 2012 U.S.
Dist. LEXIS 148282 (S.D. Ill. Oct. 16, 2012) (awarding “costs
of converting data into readable format”)
– El Camino Resources, Ltd. v. Huntington Nat’l Bank, No.
1:07-cv-598, 2012 U.S. Dist. LEXIS 146037 (W.D. Mich. May
3, 2012)
– Gabriel Techs., Corp. v. Qualcomm, Inc., No. 08CV1992, AJB
(MDD), 2013 WL 410103 (S.D. Cal. Feb. 1, 2013)

Social Media
Elizabeth Doisy
28

29
Social Media
Courts Adapt Traditional Discovery Rules to New Technology
• As use of social media by individuals and companies
proliferates, the number of cases involving discovery
of social media continues to grow
• Courts have become more successful at adapting
discovery rules and procedures to social media
• Some examples:
– Preservation and spoliation
– Authentication
– Collection of data

30
Social Media
• Preservation & Spoliation
– Dynamic nature of social media makes preservation
difficult
– At least one court has ordered a party to recreate a
Facebook page as it previously existed (Katiroll Co. v. Kati
Roll & Platters)
• Authentication
– Some courts require a showing of authentication such as
searching the individual’s hard drive or seeking
information from the commercial host
– Others are less strict

31
Social Media
• Collection of data
– Four approaches:
• requiring account holder to produce the information
themselves
• appointing a neutral expert to review and collect the
data
• permitting requesting party access to the social media
account
• third party subpoena to commercial host
– The trend is moving toward requiring the account holder
to review his own account and produce any relevant
information

Cooperation
Jennifer Rearden
32

33
Cooperation
More Than Just Nice Words
• More than just a lofty ideal; courts are actually taking steps to
foster cooperation.
• The idea is increasingly becoming the subject of pilot
programs, standing orders, proposed rule changes (Rule
37(e)), and other broadly-applicable policies.
• Courts are focusing on the specifics of cooperation—getting
parties to agree on custodians or form of production;
imposing cost-shifting or sanctions when parties do not
cooperate—rather than just issuing generalized calls for
cooperation.

34
Cooperation
Courts Taking the Initiative
• Pilot programs, standing orders, meet-and-confer
requirements, other policies (District of Delaware default
standards; Nassau County, NY Guidelines)
• “Forcing cooperation”: courts requiring parties to discuss e-
discovery issues, including form of production, and attempt to
seek agreement before coming to court (Northern District of
California checklist)
• More than just Rule 26(f).

35
Cooperation
Format of Production
• Courts expect parties to agree on the form of production
(metadata, native vs. TIFF files, etc.)
• Courts may set basic production parameters and look to the parties
to work out the rest. Da Silva Moore v. Publicis Groupe, No. 11 Civ.
1279 (ALC) (AJP), 2012 WL 607412, at *22 (S.D.N.Y. Feb. 24, 2012);
Navajo Nation v. United States, No. 06–945L, 2012 WL 5398792, at
*3 (Fed. Cl. Oct. 17, 2012).
• As predictive coding and other forms of technology-assisted review
become more prevalent, courts may increasingly expect parties to
resolve many, if not most, review
protocol-related issues consensually.

36
Cooperation
The Threat of Sanctions
• Courts do not seem to be sanctioning litigants for failing to cooperate, per
se.
• However, courts have taken such a failure into account when resolving
discovery disputes, commenting negatively on one or both parties’ failure
to cooperate. See, e.g., Vasudevan Software, Inc. v. Microstrategy Inc., No.
11-cv-06637-RS-PSG, 2012 WL 5637611, at *6 (N.D. Cal. Nov. 15, 2012).
• And in at least one case, a party used the other side’s failure to cooperate
as a defense against sanctions. Borwick v. T-Mobile West Corp., No. 11-cv-
01683-LTB-MEH, 2012 WL 3984745 (D. Colo. Sept. 11, 2012).

International E-Discovery
Gareth T. Evans
37

38
The Cross-Border Conundrum
• Increasingly common need to preserve, collect and review ESI
located in foreign jurisdictions.
• In many non-U.S. jurisdictions data privacy is viewed as a
fundamental right and personal data is afforded greater
protection than we are accustomed to in the U.S.
• U.S. courts, however, usually will not accept the operation of
foreign data privacy law as an “excuse” for failing to produce
relevant information located in a foreign jurisdiction.

39
The Cross-Border Conundrum
• In litigation and investigations, foreign data privacy laws,
“blocking statutes,” and other laws (e.g., China’s state secrets
law) may impact several aspects of the e-discovery life cycle:
– Preservation
– Collection
– Review
– Transfer out of the jurisdiction
– Production

40
Solutions
• Foreign data privacy laws typically apply to “processing” of
“personal data”
• Compliance can often be achieved through taking steps to render
processing “legitimate” under data privacy law.
• Notification to the Data Protection Authority (“DPA”) and Obtaining
Consent of DPA may be necessary.
• The Sedona Conference’s International Principles (Dec. 2011)
provides guidance for a “legitimization plan:”
– Confidentiality Order in U.S. litigation
– Processing, Culling and Review in Foreign Jurisdiction
– Redact Personal Information if Possible
• EU DPAs reacted positively to the International
Principles in 2012.

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