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Summaries, news and resources relating to eDiscovery in Delaware and beyond.
Showing 8 posts in Document Review.
This is the third in a series of posts summarizing the 7 most important eDiscovery cases in Delaware in 2014.
Herbert Chen and Derek Sheeler v. Robert Howard-Anderson, Steven Krausz, Robert Abbott, Robert Bylin, Thomas Pardun, Brian Strom, Albert Moyer, Jeanne Seeley, and Occam Networks, Inc., C.A. No. 5878–VCL, Oral Argument on Plaintiffs' Motion to Compel Production of Documents by Defendants and Jefferies and for Sanctions Against Defendants and the Court's Rulings, September 4, 2014.
While the Chen v. Howard-Anderson case has been discussed in the corporate arena as an important case relating to Delaware fiduciary law, 102(b)(7) exculpatory provisions, and Revlon duties, the case also highlights the importance of transparency in the discovery process. Chen is a reminder of how seriously the Courts in Delaware treat counsel’s discovery obligations. More ›
This is the second in a series of posts summarizing the 7 most important eDiscovery cases in Delaware in 2014.
The second case is 112359 Factor Fund, LLC and Five Nine Group, LLC v. Flux Carbon Starter Fund, LLC, Mary Carroll, Kevin Kreisler, and James L. Sonageri, C.A. No. 9568–VCL, Telephonic Oral Argument on Plaintiffs' Motion to Compel and Rulings of the Court, 06/20/2014.
In response to Plaintiffs' Motion to Compel, the Defendants claimed they did not have sufficient time or resources to review all 73,000 documents yielded by the search terms used. Vice Chancellor Laster was not swayed by these arguments. An Order had been entered earlier in the case requiring the parties to not only meet and confer regarding search terms, but to also "do more than the standard" and "confer regarding the use of an early data assessment tool…to focus on the custodians and time periods most likely to have responsive electronic documents”. Defendants’ reasons for missing the production deadline included delays in collecting the documents from their clients and insufficient manpower to properly review them. The Vice Chancellor found these explanations to be insufficient. The Court explained that in an expedited case, the parties need to think about approaches other than the “old school attorney-by-attorney review”. Had an early data assessment tool been appropriately used, as instructed, the number of search hits would not have come as a surprise and counsel could have thought ahead and planned appropriately to meet the discovery deadlines. The Court ordered that a copy of the transcript be given to Defendants clients, to help them understand that not complying with a discovery order will have serious consequences. More ›
The Court of Chancery continued to focus on eDiscovery throughout 2014. During the next few weeks we will be recapping 7 cases that covered various topics including preservation, designation of confidential material and the drafting of privilege logs. We will cover the cases in chronological order.
The first case is Sustainable Biofuels Solutions, LLC v. Tekgar, LLC and Michael Catto, C.A. No. 8741--VCP, Oral Argument on Plaintiff’s Motion to Compel and for Sanctions, Defendants’ Motion to Dismiss, and Rulings of the Court, 01/28/2014
In this dispute between a joint venture entity and one of its founding members, Plaintiff filed a Motion to Compel based on Defendants’ untimely production of emails, their blanket designation of 21,000 produced documents as Attorneys’ Eyes Only in violation of a Confidentiality Order, and lack of transparency throughout the eDiscovery process.
Before addressing the Motion to Compel, Vice Chancellor Parsons first reminded the parties of the Supreme Court case Christian v. Counseling Resources Associates, where the Supreme Court put litigants on notice that if they act without Court approval in modifying a scheduling order, they do so at their own risk. By choosing not to involve the Court, the party waives its right to dispute the opposing party’s late filings going forward. The Supreme Court advised that the best way to still “avoid motion practice and ill-will by agreeing to reasonable extension requests…[is to] promptly file a proposed amended scheduling order for the trial court’s signature.”
The court next found that the Defendants had failed to comply with their obligations under the confidentiality order by designating over 21,000 documents as Attorneys' Eyes Only. Under the order, designation required review by an attorney and a good faith basis for such designation. The court stated that "there is no way that an attorney could have looked at these documents and made a reasonable determination that there was a good faith basis for designating them as Confidential - Attorneys' Eyes Only..." The Defendants stated that they received the documents from their client at a late date and thus were rushed in their review. This necessitated the overdesignation of the documents.
Given that Vice Chancellor Parsons felt the Plaintiff had notified the Court “pretty promptly” of the discovery issues and that the Defendants had failed to comply with their obligations under the Confidentiality Order, the Court imposed sanctions of $10,000 in attorneys’ fees against the Defendants and gave them a strict deadline to complete any necessary dedesignations. The Defendants were further ordered to answer the Plaintiff’s questions regarding how they unilaterally refined the agreed-upon search terms and exactly what files were searched and to generally operate with a greater degree of transparency.
Three key takeaways can be taken from this case. First, if an attorney is unsure of who to proceed on eDiscovery issues, he or she should reach out to a colleague or vendor for guidance and assistance. The Vice Chancellor wrote that “It’s not unusual in cases of this type and in many, probably the majority, of the cases in the Court of Chancery that electronic discovery is proceeding by way of search terms and searches of custodians. That’s the way it’s usually done. If it’s a surprise to any attorney…then that attorney needs to associate himself or herself with people who know what they’re doing and are more familiar with it.”
The second takeaway is that the court should be promptly informed of any agreement regarding changes to a CMO.
Finally, parties need to factor in the time it takes to actually review documents in order to avoid situations such as confidentiality or privilege overdesignations. Parties should give themselves more than enough time to factor in the perhaps most important step between collection and production...attorney review of documents.
The entire transcript can be found here: Transcript of Sustainable Biofuels v. Tekgar
A recent podcast from the Legal Talk Network's ESI Report addresses cost control, an important issue for any client, eDiscovery attorney, or eDiscovery vendor. As the sheer volume of collections continues to increase and as the complexity and variety of the data collected continues to complicate review and production, we look to new tools to streamline the process. "Nearlining" is one such tool.
Nearlining enables reviewers to set aside unnecessary data for potential use at a later time. As a review progresses and a reviewer deems certain documents non-responsive, he may nearline those documents, which reduces a client's data footprint without deleting portions of the collection. This allows reviewers to easily access and focus on the most relevant content, but also lowers costs for clients by reducing their footprint on vendor servers, thus reducing hosting costs.
It is suggested that the non-responsiveness of documents is confirmed through a quality control process before nearlining the documents.
For a full discussion or nearlining and several other cost-savings techniques, see below:
In James v. National Financial LLC, C.A. 8931-VCL (Del Ch. Dec. 5,2014) the Court of Chancery outlined Delaware Counsel's discovery obligations as well as the type of sanctions that may be imposed for not complying with those obligations.
Plaintiff James moved for entry of default judgment against Defendant National after the Defendant failed to comply with a court order requiring it to produce a specific document (a previously produced spreadsheet that included more detailed information) as well as retain an IT consultant to assist with collection of that document. The Defendant was also ordered to provide an affidavit from the IT consultant attesting to how the document was collected.
No affidavit was produced. The updated spreadsheet did not have the information required by the court. National did retain an IT consultant, but, according to the court, this was a half-hearted attempt.
Vice Chancellor Laster granted James' Motion for Sanctions. In writing for the court, the Vice Chancellor stated that "National's discovery misconduct calls for serious measures. Although I believe that entry of a default judgment would be warranted on these facts, I will not grant that remedy in light of the Delaware Supreme Court's guidance about invoking the ultimate sanction and the availability of less punitive consequences." Instead, the court awarded attorneys' fees and ruled that the lack of information contained in the requested document resulted in an admission.
The Vice Chancellor took special care to discuss Delaware counsel's role in the discovery process. First, the Court reiterated that Delaware counsel was not merely there to sign papers and act as a mail drop. Delaware counsel is expected to be involved in the case. The Vice Chancellor, in citing State Line Ventures, LLC v. RBS Citizens, 2009 Del. Ch. LEXIS 233 (Del. Ch. Dec. 2, 2009), stated that "Even when forwarding counsel has been admitted pro hac vice and is taking a lead role in the case, the Court of Chancery does not recognize the role of purely 'local counsel'...our Rules make clear that the Delaware lawyer who appears in an action always remains responsible to the Court for the case and its presentation."
Second, the court emphasized Delaware counsel's role in discovery. The Vice Chancellor stated "The court expects Delaware counsel to play an active role in the discovery process, including in the collection, review and production of documents. If Delaware counsel does not directly participate in the collection, review and production of documents, then at a minimum Delaware counsel should discuss with co-counsel the court's expectations."
When read with other recent cases, it is clear that Delaware counsel should, at the very least, provide advice to co-counsel regarding the collection, review and production of documents. This case, along with other recent cases such as Chen v. Howard-Anderson and In Re ISN Software Corp., demonstrates how seriously the Court of Chancery takes the eDiscovery process and points to an emerging body of law on the subject.
A recent landmark decision in which the Court of Chancery ordered both sides to engage in predictive coding by using a mutually agreed upon vendor has been modified. The new order allows plaintiffs in the EORHB v. HOA matter to review their documents using traditional methods. They will also be allowed to choose a separate vendor than defendants. More ›
I believe I found this video by way of Ryley Carlock's Litigation Unbundling Ramp in Legal OnRamp. In it, Paul Ward briefly discusses the merits of "smart review"...
When it's a quick peek, as was ordered in ACS State Healthcare, LLC v. Wipro, Inc. and Wipro, Ltd., No. 4385-VCP ( Del. Ch., July 23, 2009). This is believed to be the first order of its kind in Delaware and continues the Court of Chancery's recent trend of providing eDiscovery guidance to Delaware practitioners.
The title of this post may be a bit misleading though and may simply reflect my own ignorance of the true distinction between quick peek and clawback. (Or maybe I'm being pedantic.) Certainly, there are clawback provisions in this order, but the production of documents without review is what makes this a quick peek. The two are often presented as alternative means of protecting privilege waiver in eDiscovery, but it seems that clawback protects privilege while quick peek shifts costs. So quick peek is really clawback plus cost-shifting?