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Recent Court Decisions Impacting Technology Assisted Review

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Sometimes, remarkable things happen in unlikely places.  On October 15th, in the Delaware Chancery Court, Vice Chancellor J. Travis Laster, delivering a ruling from the bench on a motion for summary judgment in a commercial indemnity dispute, sua sponte ordered the parties to use predictive coding technology.

As courts and parties are still coming to understand the use of technology assisted review and the methodologies used to implement these e-discovery tools, it is remarkable that the court would order the use of predictive coding.  More remarkable, however, was the requirement that both parties use the same e-discovery vendor.  The parties were free to show cause why predictive coding would not be appropriate in this matter.

In the words of Vice Chancellor Laster:

"This seems to me to be an ideal non-expedited case in which the parties would benefit from using predictive coding. I would like you all, if you do not want to use predictive coding, to show cause why this is not a case where predictive coding is the way to go.  I would like you all to talk about a single discovery provider that could be used to warehouse both sides' documents to be your single vendor. Pick one of these wonderful discovery super powers that is able to maintain the integrity of both side's documents and insure that no one can access the other side's information. If you cannot agree on a suitable discovery vendor, you can submit names to me and I will pick one for you."  (EOHB, Inc. et al. v. HOL Holdings, LLC, CA No. 7409-VCL (Del. Ch. Oct. 15, 2012) Transcript:  Page 66, Line 10 to Page 67, Line 2)

Commentary abounds on what is intended by the few short lines.  Many have commented on the ethical obligations of the parties sharing a single e-discovery provider, whether identical methodologies must be applied by both parties when utilizing the selected technology (ex. key words or key documents fed into the system, "seed sets"), or whether the parties must use more than just the same technology, but the same review company.  Law firms question whether this approach effectively puts them out of the e-discovery business if judges can mandate the use of the same e-discovery provider (which would need to be a third party processing and hosting vendor under the court's present mandate).  Other commentators have questioned the appropriateness of allowing the judge to select the vendor where the parties could not agree to a single vendor.  Moreover, the judge referred to "wonderful discovery super powers" - so others still question what this may mean for start-ups or smaller regional e-discovery players.  It is unclear how the various questions and possibilities will be addressed by the parties and courts, as the timeline for filing the show cause has not yet come to pass.

While predictive coding technologies can be applied across smaller document sets, they are functionally more cost effective for those cases with larger document collections.  Ultimately, the relevant documents must be reviewed by the lawyers preparing the litigation strategy or preparing for trial, but many vendors purport that the technology can effectively review and designate the entire production set, with the exception of manual review of potentially privileged documents that must be withheld. 

In addition to Delaware, the Southern District of New York (Da Silva Moore, et al. v. Publicis Groupe, et. al., 11 Civ. 1279 (ALC)(AJP), Feb. 24, 2012 Opinion and Order), as well as one other state court, Loudon County, Virginia (Global Aerospace Inc. v. Landow Aviation, L.P., Case No. CL 61040 (Vir. Cir. Ct.), have supported the use of technology assisted review.  A decision remains pending over the use of the technology in the Northern District of Illinois (Kleen Products LLC v. Packaging Corp. of America, Case No. 1:10-cv-05711 (N.D. Ill.), where the discovery issues have been hotly contested.

While many still grapple with the technology and the variations of the technology, and others still view technology assisted review as a "black box" that may not have consistent outputs depending on seed sets and which data sources are loaded first, the courts may continue to take a supportive approach for the technology, and we should see more substantive decisions related to the use of these technologies during 2013.

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