[December 16, 2014]

2014 Ediscovery Case Law: Predictive Coding Takes Center Stage in Key Judicial Opinions

This year production, preservation and spoliation dominated legal case opinions, but the clear opinion front-runner was predictive coding, with judges across the country issuing milestone opinions. This was a key finding from the yearly analysis of reported 2014 ediscovery opinions and notable ediscovery themes by Kroll Ontrack, the leading provider of ediscovery and data recovery products and services.

In the past year, Kroll Ontrack experts summarized 50 significant state and federal judicial opinions from 2014 related to the discovery of electronically stored information. There were five major categories that arose most commonly in these opinions:

• 42 percent of opinions dealt with disputes over production and the methods used.
• 22 percent of opinions focused on preservation and spoliation, including when the duty to preserve is triggered.
• 14 percent of opinions addressed cost considerations, such as cost shifting and taxation of costs.
• 13 percent of opinions discussed procedural issues, such as search and predictive coding protocols, cooperation and privilege.
• 9 percent of opinions issued orders regarding sanctions for spoliation, production disputes and noncompliance with court orders.

"Since 2000, Kroll Ontrack has tracked salient ediscovery case law," said Michele Lange, director of ediscovery marketing, Kroll Ontrack. "It's not too often that judges write specifically about predictive coding and/or technology assisted review (TAR), but when they do, it is important to take notice. In 2014, it was clear that the judiciary not only became comfortable talking about the technolgy, but also accepting it."

Trends in 2014 Case Law
The courts issued more predictive coding opinions than in any other year
In 2014, judges wrote an unprecedented number of opinions about predictive coding and TAR, working to clarify the particularities associated with the process behind using predictive coding, such as its use for EDA, the completeness of production when predictive coding is used, the use of multiple searching methods with predictive coding, and the reasonableness of predictive coding methodologies. For example, the court in Federal Housing Finance Agency v. HSBC North America Holdings Inc., the court said predictive had a "better track record in the production of responsive documents than the human review," and denied the defendant's request to challenge the completeness of the document production. 2014 WL 584300 (S.D. N.Y. Feb. 14, 2014). Further, in Dynamo Holdings Limited Partnership v. Commissioner of Internal Revenue, the court ruled that the best way to secure the "just, speedy, an inexpensive" determination of the case, under the rules, would be to use predictive coding. 143 T.C. No. 9 (2014).

Production issues proliferate with proportionality and cooperation at the center of the dialogue
As in years past, scope of production contentions engaged judges dealing with ediscovery issues; however, the top two production cases of 2014 reinforced the importance of ediscovery cooperation. Whether they occur at the meet and confer or in a stipulation, judges reiterated the importance of proportionality and productions agreements made at meet and confer conferences. For example, in Boston Scientific Corporation v. Lee, the court concluded that the time to "tap flexibility and creativity is during the meet and confer, not after" and refused to let the plaintiffs search the defendant's second, non-related laptop. 2014 WL 3851157 (N.D. Cal. Aug. 4, 2014). Further, in Melian Labs, Inc. v. Triology LLC, the court agreed with the defendant, held that party stipulations controlled the form of production and ordered native format production. 2014 WL 4386439 (N.D. Cal. Sept. 4, 2014).

New preservation and spoliation discussions emerge around unique data types
While the same discussions of duty to preserve ESI (News - Alert) and spoliation of data continued in the courts this year, there was a new discussion centered on preservation of unique data types. Among the 22 percent of opinions on preservation and spoliation, courts questioned whether voice memos, text messages and social media accounts needed to be preserved. In Painter v. Atwood, the defendants claimed the plaintiff and her two main witnesses intentionally destroyed text and Facebook (News - Alert) messages. 2014 WL 1089694 (D. Nev. March 18, 2014). Ultimately, the court held that plaintiff's counsel should have informed the plaintiff of her duty to preserve Facebook posts and text messages and ordered an adverse inference instruction.

Cases involving sanctions were often the result of bad ediscovery behavior
In 2014, sanction cases were the result of hands-off ediscovery management resulting in data loss or obstructive conduct, preventing discovery of information. For example, in Security National Bank of Sioux City, Iowa v. Abbot Laboratories, the court filed a sua sponte order on the "serious pattern of obstructive conduct" exhibited by the defendants by excessive use of "form" objections and by proliferating hundreds of unnecessary objections and interruptions during the examination of witnesses. 2014 WL 3704277 (N.D. Iowa July 28, 2014).

For more information about the 2014 case law research, visit: www.ediscovery.com/2014-top-ediscovery-cases.

About the year in review research
Findings are based on 50 prominent ediscovery opinions selected between January and December 2014. Each opinion selected was summarized, categorized and added to an ongoing database of ediscovery case law summaries, available at: http://www.ediscovery.com/pulse/case-law/.

About Kroll Ontrack Inc.
Kroll Ontrack provides technology-driven services and software to help legal, corporate and government entities as well as consumers manage, recover, search, analyze, produce and present data efficiently and cost-effectively. In addition to its award-winning suite of software, Kroll Ontrack provides data recovery, data destruction, electronic discovery and document review. For more information about Kroll Ontrack and its offerings please visit: www.ediscovery.com or follow @KrollOntrack on Twitter (News - Alert).

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