As all of my readers know, Richard Braman was the founder of The Sedona Conference. Richard made a big impact on the legal world, especially in e-discovery. He tirelessly promoted legal education conducted in a new way, based on Dialogue, not lecture and argument. He is also well-known for his controversial stand promoting Cooperation in litigation, especially discovery. This is a position I have been proud to support and follow his leadership.
This is part two of a two-part blog, Fears and Loathing (and Pain) in Seattle. Part one is found here. This is not really a Hunter S. Thompson worthy story, but it is Seattle after all. And the name of the law firm involved here just begs for the analogy.
Before you begin reading part two of this sanctions saga, take a look at the poll results from Part One. If you have not already done so, cast your vote. I promise you it is all anonymous. The last time I checked it was about evenly split on both questions, but not enough readers have voted. So, please join in now.
Seattle Court’s Finding of Bad Faith
Judge Robart in Knickerbocker v Corinthian Collegesfound that there was clear and convincing evidence the defendant, and their counsel, the Seattle law firm of Payne & Fears, had refused to participate forthrightly in the discovery process and that this refusal constitutes or is tantamount tobad faith. He found that they had delayed resolution of Plaintiffs’ claims, expended both the court’s and Plaintiffs’ limited resources on matters ancillary to the merits, and threatened to interfere with the rightful decision of this case.
Judge Robart did not think too much of defendants argument against all sanctions because the email was eventually found and produced. Here is his well written response to this argument (citations removed and emphasis added):
Corinthian argues that, at least with respect to emails, no spoliation has occurred because Corinthian has since recovered and produced all responsive employee emails from the backup tapes. The court notes that this argument contravenes what appears to have been Corinthian’s previous position that the backup tapes were not reasonably accessible. Corinthian’s characterization of the backup tapes has shifted with the winds throughout this litigation, adopting whatever posture is most convenient in the immediate context. (Compare Ruiz Decl. ¶ 17 (“I explained that it was unreasonable and impractical to search them . . . .”) with 12/12/13 Trans. (“It would be perfect. It would be one day, $1,000.”) (Mr. Brown testifying).)
Corinthian cannot have it both ways. If the information on the backup tapes was unavailable within the meaning of Federal Rule of Civil Procedure 26(b)(2)(B) such that Corinthian was not required to recover it, then the Plaintiffs’ deleted emails were, in fact, spoliated evidence. If, as Corinthian’s counsel represented at oral argument, the information on the backup tapes was accessible, then Corinthian had little basis for refusing to search the backup tapes under the parties’ Stipulated Order, no basis for filing a verification with the court affirming that it had searched “all available electronic sources”, and appears to have assumed a misleading stance with Plaintiffs from the beginning.
Corinthian counters that it encountered substantial technical difficulties and costs in retrieving the emails from the backup tapes. But any obstacles Corinthian faced in recovering the emails were the direct result of Corinthian’s inadequate discovery search, deletion of evidence, and lack of candor with both Plaintiffs and with the court. Such obstacles do not transform bad faith into good.
The judge basically accuses the defendant’s law firm, and thus the defendant itself, of not being straight with the court about plaintiffs’ emails and the defendant’s backup tapes.
Throughout the course of the litigation, Corinthian did not once provide a straight-forward explanation of the process and cost of extracting information from the tapes.
Here is how Judge Robart wrapped it all up.
In sum, the court finds, by clear and convincing evidence, that Corinthian’s and Corinthian’s counsel’s lackluster search for documents, failure to implement a litigation hold, deletion of evidence, refusal to cooperate with Plaintiffs in the discovery process (particularly as evidenced by its withholding of information regarding both the backup tapes and its interpretation of the parties’ Stipulated Order), reliance on a recklessly false declaration, shifting litigation positions, and inaccurate representations to the court constitute bad faith or conduct tantamount to bad faith.
Bad Faith Does Not Necessarily Mean Dispositive Sanctions
Even though the court found bad faith, no dispositive sanctions were granted. The adverse inference instruction the plaintiffs had requested was also denied. These harsh sanctions were denied because plaintiffs provided, as the judge put it – zero evidence that any evidence of significance to the case was not produced. They only offered conjecture. As Judge Robart noted: produced documents cannot form the basis for a spoliation instruction.
I am kind of surprised by plaintiffs’ failure to offer up some evidence that relevant evidence was not produced. You would think the plaintiffs would be able to come up with something concerning their own email.
Based on this record, the wise Judge Robart, although obviously upset with defense counsel, wanted the racial discrimination case to be tried on the merits. Besides, perhaps he knew that the emails that were produced were good enough for the plaintiffs to prove their case. Or maybe it was the opposite. The plaintiffs could have had a very weak case. We cannot tell from this opinion. We can only tell that the judge wanted the case tried on the merits, despite the bad faith e-discovery by defendant.
The judge got his message across on his intolerance of bad faith by imposition of the $10,000 fine against the Payne & Fears law firm, and the $25,000 fine against defendant. He also awarded the plaintiff’s reasonable attorney fees and costs incurred in connection with the sanctions motions and duplicative discovery related thereto. Justice was done.
Lessons learned from Knickerbocker
Several lessons can be learned from this case. For one thing, there is the trial lawyers lesson. Be careful how you answer questions posed to you by the judge. Be sure you remember these magic words: I don’t know. Restrain the urge to speculate or BS. Just keep to the facts you do know. Ask to get back to the judge on important questions with a supplemental brief or something. This case clearly shows why that is important.
The obvious primary e-discovery lesson is to always implement a litigation hold. The hold should be in writing and there should be follow up by conversations with the custodians on hold and with IT. Auto-deletions programs should be suspended, and, if the size of the case warrants it under proportionality analysis, preservation of ESI by bulk IT collection should be done. In smaller cases, collection may not be required and preservation-in-place may be adequate. There is no one-size fits all in e-discovery. Although there are plenty of plaintiff’s experts out there ready to tell a court every case should be treated like the Taj Mahal. They should not. Efforts should be scaled proportionally. See eg:My Basic Plan for Document Reviews: The “Bottom Line Driven” Approach – Part Two (e-Discovery Team, 10/9/13)
The final lesson here pertains to backup tape restoration and search. It is never as easy as you think. Indeed, the tape or tapes may have deteriorated to the point that restoration is impossible. You never know until you try. Once you restore, finding the relevant ESI can also be a challenge. Do not ever sat easy peasy when it comes to backup tapes.
This opinion does not really go into the defendant’s search efforts here, merely stating that about 3,000 relevant emails were found from a search of the emails of all employees at one location. That still seems like a low production. But I suspect the “search” consisted of running keyword terms agreed upon with plaintiff’s counsel, and then manual review of the emails that contained the terms. If they were relevant, they were part of the 3,000 produced. If not, then of course they were not produced. You do not produce irrelevant email just because they happen to have an agreed upon search term. I suspect this kind of procedure was followed here, and if so, the plaintiffs cannot complain about the search efforts made by defense counsel. They were following the parties agreed upon protocol.
We really do not know what that protocol was, but if, as I suspect, it was a keyword search protocol, then, questions of estoppel aside, the issue of whether it was a reasonable effort would depend on whether the common sense dictates for keyword search contained in Judge Peck’s Gross Construction opinion were followed. William A. Gross Construction Associates, Inc. v. American Manufacturers Mutual Insurance Co., 256 F.R.D. 134 (S.D.N.Y. 2009). Were the witnesses interviewed as to the language used? Were various keywords tested? Was the underlying data studied? The key documents? Or was it all done in the blind, like a child’s game of GO FISH? Child’s Game of “Go Fish” is a Poor Model for e-Discovery Search(e-Discovery Team blog, 10/4/09).
Tested Keyword Search is Adequate for Most Cases
Keyword search alone, when done according to the standards set forth in Gross Construction, is a fair and adequate effort in most employment discrimination cases like the one in Knickerbocker v Corinthian Colleges. Most employment casesare not really that complicated. For that reason the key documents needed to try most of these cases are not that difficult to find. Keyword search can and does work in the average case to meet the requirements of both Rule 26(g) and Rule 1 (just, speedy and inexpensive). It apparently worked just fine in Knickerbocker too, that is, after defense counsel stopped their Hunter S. Thompson routines and started playing it straight
There are some exceptional employment cases where keywords are inadequate. It depends on the case and the type of ESI, and the importance of the ESI to the case, and volume of ESI. But for most employment law cases the tested keyword search method of Gross Construction is reasonable and proportional. More sophisticated search methods, such as my favorite, predictive coding, may be needed in larger, more complex cases in other fields of law, as well as in some class action employment cases. But tested keywords work just fine for the vast majority of small cases that now flood our court system.
Most of these small cases in federal court are employment law cases. It seems like everyone has a beef these days. You would not believe the kind of frivolous cases that we see every day in my firm. Plaintiff’s counsel are not being selective. Many seem unable to overcome the natural trial lawyer tendency to be overconfident, unable to objectively predict the likely outcome of a potential client’s case. See: Lawyers as Legal-Fortune Tellers, (e-discovery Team, 3/30/14); Goodman-Delahunty, Granhag, Hartwig, Loftus, Insightful or Wishful: Lawyers’ Ability to Predict Case Outcomes, (Psychology, Public Policy, and Law, 2010, Vol. 16, No. 2, 133–157).
This limit of predictive coding to larger, more difficult cases will probably change in the future. The ever growing volume and types of ESI may demand the use of predictive coding in more and more cases. That should be made easier as the software costs of using predictive coding comes down even further. (For instance, my firm just closed a deal with Kroll Ontrack that lowers the costs for our clients even further. Look for press releases on this soon.) In the future predictive coding will expand to many more types and sizes of cases, but for now, predictive coding remains the exception in e-discovery, not the rule.
If your life revolves around discovery in the big cases, the complex cases with tons of ESI (actually, its weightless you know), then you should be using predictive coding all of the time. But for the vast majority of lawyers, dealing with the vast majority of relatively simple cases, it is not needed yet. You might as well hunt mosquitos with an elephant gun. Keyword search, done right, still works fine for the mosquito cases. Do not misunderstand me, mosquito bites can still hurt, especially if you get hit by too many of these blood suckers. You have to defend your company, but bad faith attempts to avoid discovery are never the way to go. Knickerbocker shows that.
Be straight with your judges. Always tell the truth. Talk about proportionality. They get it. The judges will protect you from the disproportionate use of e-discovery as an extortion tactic. We all know it still goes on. Has been for a long time as my parting string cite below reminds us. Both responding and requesting parties have to conduct discovery in good faith. When they do not, there are plenty of good judges around like James L. Robart to stop the abuse.
Discovery abuse as a weapon. See, e.g.:
Advisory Committee Noteto the 1983 Amendment of theFederal Rules of Civil Procedurecreating Rule 26(g) (“Thus the spirit of the rules is violated when advocates attempt to use discovery tools as tactical weapons rather than to expose the facts and illuminate the issues by overuse of discovery or unnecessary use of defensive weapons or evasive responses.”)
Malautea v. Suzuki Motor Co., Ltd., 987 F.2d 1536, 1542 (11th Cir.1993) (Fed.R.Civ.P. 26(g) was “designed to curb discovery abuse by explicitly encouraging the imposition of sanctions.”)
Bondi v. Capital & Fin. Asset Mgmt. S.A., 535 F.3d 87, 97 (2d Cir. 2008) (”This Court . . . has taken note of the pressures upon corporate defendants to settle securities fraud ‘strike suits’ when those settlements are driven, not by the merits of plaintiffs’ claims, but by defendants’ fears of potentially astronomical attorneys’ fees arising from lengthy discovery.”)
Spielman v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 332 F.3d 116, 122-23 (2d Cir. 2003) (“The PSLRA afforded district courts the opportunity in the early stages of litigation to make an initial assessment of the legal sufficiency of any claims before defendants were forced to incur considerable legal fees or, worse, settle claims regardless of their merit in order to avoid the risk of expensive, protracted securities litigation.”)
Lander v. Hartford Life & Annuity Ins. Co., 251 F.3d 101, 107 (2d Cir. 2001) (“Because of the expense of defending such suits, issuers were often forced to settle, regardless of the merits of the action. PSLRA addressed these concerns by instituting . . . a mandatory stay of discovery so that district courts could first determine the legal sufficiency of the claims in all securities class actions.” (citations omitted))
Kassover v. UBS A.G., 08 Civ. 2753, 2008 WL 5395942 at *3 (S.D.N.Y. Dec. 19, 2008) (“PSLRA’s discovery stay provision was promulgated to prevent conduct such as: (a) filing frivolous securities fraud claims, with an expectation that the high cost of responding to discovery demands will coerce defendants to settle; and (b) embarking on a ‘fishing expedition’ or ‘abusive strike suit’ litigation.”)
What if you had to choose between not taking any depositions in a case and not doing any e-discovery? A far-fetched choice you might think, but is it really? In what percentage of cases is e-discovery avoided by one or both sides? Perhaps you live in an e-discovery bubble like I do, else why would you be reading this blog? In our world almost all cases have e-discovery. But still, be real, what percentage do you think applies across the country? The world? Just ask any state or federal judge how often they see e-discovery in their cases. Umm. Almost never. How often are there no depositions?
The vast majority of lawyers do not do e-discovery in their cases, but they do take depositions. They are in effect answering my question every day by their behavior. For them this is a Hobson’s choice. You have no doubt surmised that I think they are making a poor choice, a foolish choice. But are they really? Before I go any further, let us review the basic litigation background behind my question.
Almost all law suits are concerned with disputed issues of fact. If there are no disputes as to what happened, then the case could be decided on the pleadings alone, or at least on a summary judgment basis. Judgment on the pleadings are rare, and in such cases, discovery usually has no role. Summary judgments are not that uncommon, and they may well involve some discovery, but even there the discovery should be limited. In most cases, one side has one version of an event, the other has another version. Same event, but different stories as to what happened.
The focus of litigation is to line up evidence to prove one side or the other’s version of events. A trial is then required to resolve the disputed issues. A trial you may remember is a fabled, now nearly mythical event, that everyone prepares for but never does. Trials before judges or juries were still common when I started practicing law in 1980, and now only occur in less than 1% of federal cases.
Getting back to the disputed issues of fact, the recollections of what happened usually vary dramatically on certain key issues. I am not talking about the interpretations of what happened, nor the legal significance of what happened. Those are not disputed issues of fact. Those are disputed issues of law, and the application of law to facts. Every good litigator understands the difference between law and fact, and also the difference between material and immaterial facts in summary adjudications. Disputed issues of material facts of what really happened are the subject of discovery. Who shot John? That sort of thing.
That is what discovery is all about. To discover what really happened. To learn the true versions of events that occurred in the past, events that now form the basis of a dispute.
So much for litigation 101. Now to answer the question raised by the blog. What if you had to choose between not being able to ask people questions about what they remembered happened, and not being able to look at the documents they created at the time, the emails, text messages, FaceBook postings, Tweets, spreadsheets, word documents, PowerPoints, etc. Which would you choose?
Bear in mind that both sides have to plead their version of the events. It is in the complaint, or answer, or affirmative defenses. Also bear in mind that you can still serve Interrogatories and Requests for Admissions. You just have to choose between depositions and written discovery, in other words, e-discovery. Which would you choose? Which should you choose?
I submit that in the vast majority of cases that make their way into federal court the obvious choice is to do e-discovery, and forego depositions. You pretty much know what they are going to say anyway. Moreover, people have terrible memories or what happened, very convenient memories. Some wise guys will even deliberately lie.
I know that all trial lawyers over forty have Perry Mason delusions of grandeur. They think their awesome cross-examination will cause the witness to break down and admit the truth, or at least get them to say what they want. Maybe they will even cry in the process. I know I still suffer from that delusion. It is a delusion buttressed by the few times, to be honest, very few times, in my career where that really happened. We tend to forget that most depositions are just frustrating exercises in pinning people down. We focus our memories on the rare breakthroughs and highlights. Overconfidence like that is just part of most lawyers personalities, as I explained in Lawyers as Legal-Fortune Tellers.
Even the times where I found depositions to be very effective — times where key admissions were made, stories were changed — usually hinged on being able to show the witnesses certain key documents. Then the highly charged Isn’t it true that … ? questions would follow. Sometimes we would even say, or at least infer, Were you lying then, or are you lying now? Great fun indeed. But wait, under the hypothetical I have posed, the choice between discovery of writings/things, and depositions, you would not have any documents to impeach the witness. You would not have an Exhibit “A” to refresh the witnesses recollection.
For me the answer to this question is easy. In the average case in federal court, if I had to choose between not taking any depositions, and not being able to read any of the documents, I would forego the depositions. If the case actually did go to trial, then I could exercise my Perry Mason skills. After all, Perry never had to take any depositions. He just went right to a hearing or trial. I may not know exactly what the witnesses will say at trial, which, by the way, is true for depositions too, but I would have a pretty good idea. Plus, and here is the key part, I would be armed with Exhibit “A.” Maybe even Exhibits “A” though “G.” See: Secrets of Search – Part III, Fifth Secret: 7±2 Should Control All e-Discovery (But Doesn’t). I would have the few smoking gun documents needed to prove my case. The witness testimony would just be the icing on the case.
This is the right answer for me. I am just cocky enough, and experienced enough, to know I could pull off a trial like that, if I was lucky enough to be a part of the one percent solution. Many trial lawyers are like that (although not many have read the law review article showing how overconfident most of us are, but I digress. See: Goodman-Delahunty, Granhag, Hartwig, Loftus, Insightful or Wishful: Lawyers’ Ability to Predict Case Outcomes, (Psychology, Public Policy, and Law, 2010, Vol. 16, No. 2, 133–157)). Where I am different from most trial lawyers, or better said these days, most litigators, is that am also cocky enough, and experienced enough, to know I could find the truth from the documents and things.
I am talking about the average case in federal court, remember. Not all cases even have writings as evidence, but most do. My premise is that in most cases the writings, the documents, the things, will have the real story. They will show the contemporaneous account of events, not the convenient recollections. They will be the doorway to the truth.
That is the premise behind a blog I wrote on the relative importance of e-discovery to justice. Mathematical Formula for Justice Proves the Importance of ESI in Civil Litigation (e-Discovery Team, 8/30/09). It featured the ideas and quotes of Bertrand Russell and an Order by Judge James Francis in a case concerning a $4.2 Million impressionist painting. Green v. McClendon, 2009 WL 2496275 (S.D.N.Y. Aug. 13, 2009).
Unlike most litigators today I am confident that I could find the ESI smoking guns, if they exist. And if they do not, well, that in itself tells a story. The absence of proof of one side’s version of events can, and often does, prove the falsity of their accusations. The missing documents speak louder than any biased witness.
I call this the Unicorn search problem, which I have previously described in Predictive Coding Based Legal Methods for Search and Review. Of course, this requires proof of excellent search, another challenge that does not intimidate me or other e-discovery specialists. Indeed, I would relish the opportunity to demonstrate and drone on and on about legal search skills. As Ex. “A” to prove this point, I offer this blog.
Is My Answer the Right Answer?
That bring us to the heart of the matter. My answer is right for me. All I have done since 2006 is e-discovery. I also know computer systems and technology pretty well due to my fascination and working with it since 1978. Still, given my age, I have probably taken more depositions, than handled modern-day e-discovery projects. This puts me in a position not typical for most lawyers today, a position where I am just as comfortable with e-discovery as I am with depositions.
In view of my knowledge and skill at e-discovery, the choice of documents over depositions is the right choice for me. The logic of that choice is incontrovertible, if you accept my premise that in today’s world, documents, especially ESI, are better indicators of the truth than swearing contests.
But is it the right choice for you? If you are like me, and most of my readers are, then the answer is clearly yes. In fact, some of you may be more skilled at e-discovery than depositions, which weighs even stronger in favor of documents over depositions.
But, dear readers, we are so different from mainstream lawyers, are we not? The vast majority of legal professionals lie outside of the e-discovery expert bubble. Most lawyers and paralegals have never even done an e-discovery project. Indeed, a few among the lawyer class still do not know how to turn on their computer. I have even heard of one or two that do not have a computer in their office. Chief Justice John Roberts still handwrites out all of his opinions!
I am willing to bet that the majority of lawyers in the U.S. have never even read the 2006 e-discovery rule amendments, much less heard of the current proposals. Why, I was at a CLE recently where no one had even heard of Judge Shira Scheindlin! (Please don’t tell her.) They could care less about e-discovery. In short, they do not know how to do it. They do not want to learn. Out of sight, out of mind. End of story.
Accepting the premise that the vast majority of lawyers are unable and unequipped to do e-discovery, and in fact are not doing it, the choice here is a false one. They never do any e-discovery anyway, so there is nothing to give up in choosing depositions over e-discovery. They in effect make that choice everyday in their Nineteenth Century Perry Mason inspired legal practices.
Putting aside Rule 1.1 of ethics (competence), for lawyers unskilled in e-discovery – which means the vast majority of lawyers – their choice to take depositions and forego e-discovery is the correct choice. They would just make an expensive mess of a big ESI search anyway. So they should stick to what they know. They should do what they do well. After all, they can muddle through with paper printouts. They have been doing that for years. For a decade, or more, most lawyers have shown that it is quite possible to make do with the email their clients find for them and fax over.
It never even occurs to most lawyers today, especially the ones over forty, that their might be more skills required to finding relevant ESI than a keyword search of Outlook email. They are still quite impressed with keyword search technology, just as was Judge Thomas F. Hogan was in 2004. In re Lorazepam & Clorazepate, 300 F.Supp.2d 43, 46 (D.D.C. 2004) (“… the glory of electronic information is not merely that it saves space but that it permits the computer to search for words or ‘strings’ of text in seconds.“)
Most lawyers respond with disbelief if you explain that keyword search is an old computer method invented in the fifties. They think you are a complete idiot if you say it is ineffective to find email. After all, it works on Google, WestLaw, and Lexis. They are unaware of the string of cases that came just four years after Lorazepam that speak of better ways of search and the problems with keywords. United States v. O’Keefe, 37 F. Supp. 2d 14, 24 (D.D.C. 2008) (Facciola, M.J.); Equity Analytics, LLC v. Lundin, 248 F.R.D. 331, 333 (D.D.C. 2008) (Facciola, M.J.); and Victor Stanley, Inc. v. Creative Pipe, Inc ., 250 F.R.D. 251, 260, 262 (D. Md. 2008) (Grimm, M.J.). For an updated collection of modern search cases and discussion on legal search, see the The Sedona Conference® Best Practices Commentary on the Use of Search and Information Retrieval Methods in E-Discovery (2013).pdf(December 2013). (Yes, after being in so-called draft form since 2007, the Search Commentary has finally been completed. It is good reference for search geeks. Congratulations to the 2013 Editors-in-Chief: Jason R. Baron and Maura R. Grossman (the delay was not their fault). Note that Jason was the sole Editor in Chief in 2007 for the then revolutionary, initial draft version of the Search Commentary.)
If you still have the average Joe Lawyer’s attention when you go on to speak about artificial intelligence as a far better method for search, they are inclined to think it is just science fiction stuff. But if you tell them that is how their Pandora works, and they indeed use Pandora, which more and more of them under forty do, you may get them to think twice about that. Still, the average lawyers thinks predictive coding is only something of interest to technologists and scientists, not lawyers. See eg.Practice Point 8 of the Sedona Search Commentary.
According to average lawyer gestalt, if the other side in a case is an aggressive jerk, and plays the mean e-discovery card, you can always just hire a vendor to do it for you. E-discovery law is not really the practice of law anyway. Once you stop searching for paper documents, and crossover into a search for ephemeral ESI, you have left the world of law. You have entered the Twilight Zone of litigation. You are no longer practicing law and gathering evidence. You might as well be a robotics expert. It is a quasi-legal world where otherwise perfectly ethical lawyers cheerfully delegate all duty to find relevant information to non-lawyers. Just ask any practicing lawyer who has crossed over to the vendor side. They now live in an imaginary world of vendor omniscience, a world where legal advice becomes technical advice because magical computers are invoked. If any of my readers doubts this is what the average lawyer really thinks, you should step out of the bubble more often. I am not exaggerating.
Given equal skills in deposition taking, and e-discovery, if you had to choose between Rule 30 and Rule 34, you should choose production over depositions. It has a much higher probability of leading to evidence that will help you. The contemporaneous accounts are much more likely to uncover the true version of the facts. If, as may be true for some of you in the bubble, your skills in e-discovery are stronger than your deposition skills, then the choice of Rule 34 over Rule 30, is even more obvious. But for the vast majority of lawyers, who have no skills in e-discovery, or very little skills, and have pretty good skills in deposition taking, certainly far more than in e-discovery, they should choose Rule 30. They should choose depo over disco. It may not lead to the truth, it may be an exercise in futility, but at least they will know what they are doing. Not convinced about the futility aspects, take a moment to watch these wonderful excerpts from the March 6, 2014, deposition of Martin Bieber.
Choosing depo over disco is what the average Joe Lawyer on the street does every day. They make a logical choice. They do what they know how to do. They take depositions. They do not do what they do not know. They do not ask for ESI. They avoid e-discovery. If it is pushed on them, they scowl and hire a vendor to handle it for them. This is perfectly natural and rational behavior. Or at least, that is how it seems to them.
Thus here we are. This is the state of the legal profession in 2014. Stuck in an ethical quagmire of competence. Eventually the profession will grow out of this problem. There will be new problems. Time will heal all. So too will Watson the Lawyer, the handy artificial intelligence robot who will come in time. In the future every law firm will have one, and likely have an AI-Support Department to handle it too. The few human lawyers remaining will not even understand the question posed by this blog. If they do, they will be mystified and shake their heads in disbelief concerning their primitive predecessors. Some already do.
Predictive analytics has progressed to the point that Corporate Counsel could, given the right tools and knowledge, predict and prevent many of the law suits now hemorrhaging corporate America. Insurance companies could do the same thing, predict what claims will likely trigger litigation and take steps to avoid these costly disputes. It is all a matter of knowing how to obtain and use Smart Data to serve as an early warning system — Smart Data that will reveal emerging patterns of wrongful conduct before they ripen into litigation. I call this data analytics based program of litigation avoidance, Presuit™.
Essentially I am talking about the use of predictive coding type AI technologies to take corporate compliance to the next level. When Presuit™ gets off the ground, litigation will never be the same. It will not stop all litigation, but, once predictive analytics catches on, there will certainly be far less litigation than there is now.
Presuit™ is not a Minority Report science fiction dream. This is all within the reach of existing software and probability analysis based search methods. Even though it has not been done before, based on my experience with active machine learning, I am sure it can be done. In fact, I have a pretty good idea of how to do Presuit™, which is why I’ve trademarked it and begun services. SeePresuit.com. And I am not the only one. I know several other attorneys who probably could too. We see the idea. So too do a few information scientists I’ve talked to about it. The scientists and vendors all agree it can work. They are probably getting ready to offer services like these too, I don’t know. What we all need to make it work is a visionary general counsel and enough time, money, and scientific-technical support to set it up and perfect workable systems.
Presuit™ is the next logical step to the application of artificial intelligence to Big Data and the Law. It is where technology is inevitably taking the Law. Yes, it will take significant funds to implement such a program, and it will take time. But the potential savings and other benefits of prediction and prevention of law suits are mind-boggling.
History is ripe for the making and the time is now. The big question is which corporation will come forward first to make it happen, who will be the first to embrace Smart Data to drastically reduce their litigation load. Then the related big questions for my friends and colleagues will be which lawyers, scientists and vendors will be tapped to help them to do it.
What is Smart Data?
Smart Data generally is information that has been enhanced by predictive analytics. (For what others outside of the legal profession have to say about Smart Data see this CDNet webcast, and also see here,here, here, here, and here.) Most commentators agree that the whole point of Big Data is to obtain Smart Data. In that sense Smart Data is the small, useable Signal in the Noise. There are all kinds of Smart Data, but for purposes of predicting litigation, Smart Data is data that has been probability ranked as relevant or irrelevant to different legal causes of action. It consists of documents and other ESI commonly associated with various types of illegal activity.
This kind of Legal Smart Data reveals patterns of emerging wrongful conduct. It is information that can be used to detect and prevent illegal activities. To be specific, a computer file, such as an email or attachment, becomes smart for these purposes when it has had an extra layer of metadata added to it that reliably ranks the probable relevance of that file to one or more legal issues. Thus, an email would be smart in the sense it knows it has a 90% probability of being evidence of a certain issue, such as age discrimination, or consumer fraud. Data is not legal smart if it has no probability ranking related to misconduct of some kind.
Predictive Coding Example From Current e-Discovery Practice
As an example, when I complete an active machine learning training of a set of corporate email, all of the email and attachments have an extra metadata field ranking the probable relevance, or irrelevance, to a set of one or more legal issues. (The final protections review and productions are made based on these probability metadata.) As per my custom, where appropriate there would also be probability rankings for high-relevance and privilege.
As the subject matter expert my work in training the system transformed the email into Smart Data, data that knows its probability of relevance. The data is as smart, as good, as I was as the SME on the subject, or, as is often the case, as I was as the surrogate for another SME. In other words, the degree of intelligence of the data would depend in part on the degree of expertise of the SME. Was the SME a world authority on these issues, or just the best available at the time?
The data is also as smart, as good, as my work was in the training. In other words, the degree of intelligence of the data would depend in part on the quality of the human training. Was the trainer qualified, experienced? Did they spend 20 hours to train the machine or 200?
The data is also as smart, as good, as the software that improved upon my work. In other words, the degree of intelligence of the data would depend in part on the quality of the software. The machine — the algorithms — enhance the natural intelligence put into the data by the human SME, in this example, me, with the machine’s own artificial intelligence. Was it the best available software? Did it perform well on this data?
Degree of subject matter expertise, human skill in training, and computer skill in analysis – all three factors impact the quality of any predictive coding project. That in turn impacts the effectiveness of the resultant Smart Legal Data to train new data as it enters the system. So too would other elements, such as the diversity or distinctiveness of the prior or additional data.
Smart Legal Data that results from every predictive coding project could then be reused to train new data as it is later created and added to the client’s system. The Smart Legal Data from a prior case would have to be modified somewhat to eliminate insignificant distinctiveness, and culled so as to only include key probability ranges, but this will be fairly easy.
The modified Smart Legal Data could then be used as training data to rank new email and attachments as to probable relevance. At this point the SME would just play a secondary and occasional role for quality control purposes. The training could proceed automatically in an unsupervised, or at least semi-supervised, manner. (That part will be tricky to set up.) When patterns emerge suggesting a new cause of action may be developing, alerts are sounded. Legal counsel is advised. Presuit™ has averted yet another law suit.
The ultimate in litigation readiness is to eliminate suits before they happen, to know about them in the presuit stage. This is now possible in an ongoing virtuous feedback machine training loop that takes Smart Data from old suits to train data in corporate ESI systems.
Once an SME trains data in the course of a lawsuit, and makes it smart, the SME’s mind has, to a certain extent, imprinted itself on the data. In our current legal practice when an old suit is over we flush that intelligence away. The critical documents, the Smart Legal Data, are not saved for reuse.
That is a huge waste of SME intelligence, effort, and money. Instead, the key components of the Smart Data should be saved, and improved upon, nurtured, and grown. The AI enhanced Smart Data should be added back to the corporate ESI systems. The Smart Data should be used again, and again, to train the rest of the data. It should be used as an indicator to detect the same and similar legal issues. For example, once you have created Smart Data on fraud, keep it in the system to detect more fraud. Literally, it takes a thief’s data to catch a thief’s data. I am quite sure this will work, if done carefully and with input from the right scientists and technologists in the area. This will not an easy undertaking, but that it is possible at all is incredible. It is a profound example of what MIT’s Brynjolfsson and McAfee write about in their new book, The Second Machine Age.
Litigation Avoidance By Early Detection of Relevant Data
You can call this an aspect of Information Governance, if you want, and some are, or I predict, soon will. But I call Presuit™ an aspect of Litigation Readiness (the first step in the EDBP). It is the complete avoidance of litigation by identifying and correcting wrongful action before it festers into a law suit. Nip it in the bud. For example, it could be used to detect sexual harassment in the workplace as soon as it begins to manifest in emails or texts. Bring the employees to H.R. for counseling before a charge is filed. Think of the savings; not only monetary, but mental and emotional. Presuit™ will change everything.
Employee litigation could be drastically reduced by using Smart Data analytics, but that is just the beginning. The same could be applied to almost all litigation that now plagues business and government. For a few examples consider government false claims act cases, fraud, trade secret theft, patent infringement, conspiracy, foreign bribery. Any wrongful activity carried out by an employee in an enterprise, including outright illegal activities, leaves traces in the company’s information system. Under a Presuit™ program computer systems are enhanced with Smart Data to identify these patterns and alert management to investigate.
A level one investigation may show that the computer alert was a false alarm, in which case the computer anyway learns from the pattern detection error, and no harm is done to the employee. Conversely, if the pattern was correct and confirmed by further investigation, then corrective action can be voluntarily taken. The misconduct can be stopped before it gets out of hand. Employees can be counseled and retrained. Where appropriate they can be disciplined or fired, or in extreme cases, reported to police.
This is all far better than our current system where in-house counsel often does not know of a problem until a suit is filed, or a government subpoena is served. Believe me, problems are easier to solve, and far less expensive, when you do not have the help of plaintiff’s counsel.
National Security Agency Example
I am not going to go off on a political tangent here, but for purposes of quieting the naysayers out there who may think these proposals are farfetched, consider the example of the National Security Agency. The NSA essentially tries to take the Big Data of all world communications to find the Smart Data revealing patterns of terrorist activities. The keyword search the NSA does of metadata is just the rough culling step of search (step 6 in the EDBP). The NSA keyword search does not create Smart Data, but does create a more manageable size for data for the NSA to deal with, and does find high value targets in the smaller universe. The Smart Data is created in the next step where the predictive analytics algorithms are run on the communications of interest (step 7, C.A.R.).
When, in the case of the NSA, that Smart Data shows probable terrorist activities, then the more direct surveillance and corrective action steps are triggered; warrants are issued and human agents move into action. That is precrime in action to try to stop terrorism.
The same multimodal search process that the NSA uses is already available to corporate counsel for Presuit™. Smart Data systems can be set up to alert in-house counsel to all type of potentially litigation triggering activities. The predictive analytics software may not be as sophisticated as the NSA’s, but it does work very well, especially with the much smaller volumes of data that most corporations have to deal with (compared to the NSA).
For corporate counsel, the Smart Data comes when data ranked by expert input and an ongoing process of machine learning shows probable undesired conduct by a corporate employee. It could be discrimination, or fraud, or any number of corporate torts or breach of statutory or contractual duty.
When these signals are detected from the noise of corporate information, then more direct investigation by the legal department is triggered. Corrective and remedial actions are taken where appropriate. The misconduct is stopped. Damages are mitigated, if not avoided entirely. Most importantly, the expense and harassment of litigation has been avoided. Your computer doors have not been opened to fishing by plaintiff’s counsel.
Presuit™ is agreat tool for corporate good citizenship. The predictive analytics from recycling Smart Data will empower legal counsel to identify and correct employee misconduct before new litigation ensues. When widely adopted, businesses will save hundreds of billions of dollars a year in wasted litigation costs. Weeding out misconduct early will also significantly improve employee morale. It will free a company to act in accord with its ideals, and its workers to operate at peak efficiency and productivity.
Still, machine learning for legal compliance is a new tool, and Smart Data has never before been used to identify potential litigation. What companies will be the first adopters of Presuit™? You would expect it to be the serial litigants, the ones with the greatest litigation expenses to save. Perhaps an insurer? But innovation rarely proceeds in a rational manner and often takes surprising routes. Time will tell.
This is the final part of a three-part blog. You will need to read the first two segments for this conclusion to makes sense. See Part One and Part Two of Scientific Proof of Law’s Overreliance On Reason: The “Reasonable Man” is Dead, Long Live the Whole Man.
Final Word From Dan Ariely
Getting back to Dan, the psychologist economist, in addition to teaching and running very clever experiments at MIT and Duke, Dan is the founder of an organization with a name that seems both funny and ironic, The Center for Advanced Hindsight. He is also a prolific writer and video maker, both activities I admire. See for instance his informative page at MIT, his blog at DanAriely.com, his several books, and his videos, and even though its slightly boring, see his web page at Duke.
As a final piece of evidence on overreliance on reason I offer more testimony by Professor Ariely’s via another video, one which is not at all boring, I swear. It is called The Truth About Dishonesty. It concludes with a subject near and dear to all lawyers, conflicts of interest. The non-rational impact of such conflicts turns out to be very strong and the law is wise to guard against them. Perhaps we should even step up our efforts in this area?
Cornerstone Made of Pudding
The scientific experiments of Dan Ariely and others show that the cornerstone of the Law – reasonability – is not made of granite as we had thought, it is made of pudding. You can hide your head in the sand, if you wish, and continue to believe otherwise. We humans are quite good at self-delusion. But that will not change the truth. That will not change quicksand into granite. Our legal house needs a new and better foundation than reason. We must follow the physicists of a century ago. We must transcend Newtonian causality and embrace the more complex, more profound truth that science has revealed. The Reasonable Man is a myth that has outlived its usefulness. We need to accept the evidence, and move on. We need to develop new theories and propositions of law that confirm to the new facts at hand.
Science has shown that our current reason-only-based system of justice is on shaky grounds. It is now up to us to do something about it. No big brother government, or super think-tank guru is going to fix this for us. Certainly not scientists either, but they should be able to help, along with technologists, programmers and engineers.
What are the implications of the findings of unreliable mental processes on the Law and our ability to reach just decisions? We should ask these questions concerning the Law, just like Professor Ariely is asking concerning Economics. Our fundamental legal assumption that all people can act out of reason and logic alone is false. Decisions made with these faculties alone are the exception, not the rule. There are a number of other contributing factors, including emotions, intuition, and environment. What does this mean to negligence law? To sanctions law? Now that the Reasonable Man is dead, who shall replace him?
Just as classical economic theory has had it all wrong, so too has classical legal theory. People are not built like reasonable machines. That includes lawyers, judges, and everyone else in the justice system, especially the litigants themselves.
If Not Reason, Then What?
Since human reason is now known to be so unreliable, and is in fact, only a contributing factor to our decisions, on what should we base our legal jurisprudence. My answer is in the title of this blog. I believe that the Reasonable Man, now that he is known to be an impossible dream, should be replaced by the Whole Man. Our jurisprudence should be based on the reality that we are not robots, not mere thinking machines. We have many other faculties and capabilities beyond just logic and reason. We are more than math.
So I propose a new, holistic model for the law. It would still include reason, but add our other faculties. It would incorporate our total self, all human attributes. We would include more than logic and reason to judge whether behavior is acceptable or not, to consider whether a resolution of a dispute is fair or not.
A new schemata for a holistic jurisprudence would thus include not just human logic, but also human emotions, our feelings of fairness, our intuitions of what is right and just, and multiple environmental and perceptual factors. I suggest a new model start simple and use a four-fold structure like this, and please note I keep Reason on top, as I still strongly believe in its importance to the Law.
Some readers may notice that this model is similar to that of Carl Jung’s four personality types and the popular Myers Briggs personality tests. I am not advocating adoption of any of their ideologies, or personality theories, but I have over the years found their reference models to be useful. The above model, which is proposed only as a starting point for further discussion, is an extrapolation of these psychological models.
Call For Action
No one knows yet knows the full implications of the new data from science about the limited impact of logic and reason on human decisions. No one knows how to modify our legal systems to account these insights. Certainly I do not. But I do know that we should do something to reduce our overreliance on the Myth of the Reasonable Man. We should put the foundations of our legal system on something else, something more solid, more real than that.
In short, we need to put our house in order before it starts collapsing around us. That is the reasonable thing to do, but for that very reason we will not start to do it until we have better motivation than that. You cannot get people to act on reason alone, even lawyers. So let us engage the other more powerful motivators. To start the ball rolling, I will give special recognition and publicity to the best suggestions received from my readers to this problem, the best comments to this blog.
Maybe reason alone should always be secondary to simple fairness? Maybe that feeling of fairness, is more reliable than reasoned processes. Run the experiments please scientists. How reliable are our feelings of fairness? More importantly, what is the impact of feelings on our judges who pay attention to that? Maybe feelings should be on top of the new Holistic model. I personally doubt that, but who knows for sure until experiments are done. What I do not doubt is that feelings need to be taken into consideration more than they are now as true motivators of human action.
Maybe this means we should bring back equity, and down play law, like the old days, where we used to have Courts of Law and separate Courts of Equity. By the middle of the last century, Courts of Law won out in most states except Delaware, Mississippi, New Jersey, South Carolina, and Tennessee. Separate Equity Courts were closed down in favor of Courts of Law. Maybe we got it backwards. Maybe we were all led astray by our false confidence in reason.
Maybe we should now close our courts of Law and reopen our courts of Equity? How has it worked out for the states that kept equity courts? Have Chancellors truly been able to side-step strict rules of law when they felt it was equitable to do so? If so, how has that worked out? Has power been abused? Or has justice been attained more often? What can we learn from chancery courts that might help us build a more holistic court of the future?
A Few More Specific Suggestions of Reform
As discussed already, the AI enhancements now moving the law will continue to expand as a tool for the lawyers willing to learn how to use them. They will enhance and help improve our limited reasoning abilities. They will help us be more efficient. They could also help us to stay completely honest, if we allow them to. So too will more emotional, in your face type judges, whether we let them or not. We need more judges who do not mind getting down into the weeds, to really understand the facts, and then tell you what they really think, both good and bad please.
Maybe timely reminders of ethics codes and serious under penalties of perjury type threats will also help? Maybe new, improved, and customized oaths will help? Oaths have been shown to be effective by Ariely’s research, so we should modify the rules accordingly.
Maybe new truth recognition technologies should be used? Could a truth hat with built-in neural net be that far off? How about Google Glasses apps that provide reliable new feedback of all kinds on the people you watch testifying? That cannot be too far off. (The lie detection apps already on the market for iPhones, etc., all look bogus to me, which is not unexpected based on the limited biofeedback the phone sensors can provide.) Even if the information is not admissible as evidence, it could still be quite valuable to lawyers. (Write me if you know of anyone working on any commercial projects like this for lawyers.) Perhaps some of the recent discoveries in neuroscience could begin to be used in the justice system in all types of unexpected ways?
Maybe public recognition and awards to lawyers and judges who get it right will help? And awards to litigants who do the right thing, even if they lose the case? How about a discretionary set-off for defendants like that? How about the converse? Shame can be a powerful motivator too.
Maybe we should change the conditions and environments of places where witnesses are questioned, where mediations and trials are conducted? Maybe we should provide special training to court reporters on oath giving? Maybe we should have trials again, and not just settlements?
We need to look for all kinds of motivators. Knowledge and reason alone are not a solid foundation for justice.
Changes are inevitable anyway in all social structures, so we should try to shape the ongoing changes in the Law. We should study what science has found and be guided by truth, not tradition.
We should try to move away from overreliance on reason alone. Where we must still rely on reason, and of course we must, we should look for science and technology based methods to impose even more checks and balances on reason than we already have. We should create new systems that will detect and correct the inevitable errors in reason that all humans will make – lawyers, judges and witnesses alike. Perhaps computers can help with this? Perhaps it would help to have easier and less expensive appeals? Especially interlocutory appeals? Perhaps greater use of experts, panels and special masters? We really need to start focusing on this, and, by the way, we cannot just think our way out of a prison of thought. We need to use all of our faculties.
We also need help from the scientific community. We need someone like Professor Ariely to focus on Law the way he has focused on Economics. So far I have not found anyone like that.
Please feel free to share any ideas you may have in the Comments to this blog below, or by private email to me. Again, the best comment will be recognized and praised. I may even give you some shout-outs at LegalTech this week. By the way, if you see me there, please take a moment to stop me and introduce yourself. I always like to meet my readers. If you know of any research psychologists who might be interested in these issues, please share this blog with them. I have already reached out to Dan Ariely. He responded right away and promised to provide a more detailed reaction later. When he does I will share his input in a later blog.
Ralph Losey is a practicing attorney and shareholder in a national law firm with 50+ offices and over 800 lawyers where he lead’s the firm’s Electronic Discovery practice group. Ralph is the author of five books on electronic discovery published by West Thomson, the ABA, and e-Discovery Team® LLP. He is also the founder of Electronic Discovery Best Practices, founder and CEO of e-Discovery TeamTraining, an online education program. Ralph has limited his legal practice to electronic discovery since 2006, with a special interest in software and the search and review of electronic evidence using artificial intelligence. Ralph has been involved with computers, software, and the law since 1980. Ralph has the highest peer AV rating as a lawyer and was selected as a Best Lawyer in America in Commercial Litigation. His full biography may be found at RalphLosey.com.
Ralph is also the proud father of two children, Eva Grossman, and Adam Losey, an e-discovery lawyer (married to another e-discovery lawyer, Catherine Losey), and best of all, husband since 1973 to Molly Friedman Losey, a mental health counselor in Winter Park.
1. Electronically stored information is potentially discoverable under Fed. R. Civ. P. 34 or its state equivalents. Organizations must properly preserve electronically stored information that can reasonably be anticipated to be relevant to litigation.
2. When balancing the cost, burden, and need for electronically stored information, courts and parties should apply the proportionality standard embodied in Fed. R. Civ. P. 26(b)(2)(C) and its state equivalents, which require consideration of the technological feasibility and realistic costs of preserving, retrieving, reviewing, and producing electronically stored information, as well as the nature of the litigation and the amount in controversy.
3. Parties should confer early in discovery regarding the preservation and production of electronically stored information when these matters are at issue in the litigation and seek to agree on the scope of each party’s rights and responsibilities.
4. Discovery requests for electronically stored information should be as clear as possible, while responses and objections to discovery should disclose the scope and limits of the production.
5. The obligation to preserve electronically stored information requires reasonable and good faith efforts to retain information that may be relevant to pending or threatened litigation. However, it is unreasonable to expect parties to take every conceivable step to preserve all potentially relevant electronically stored information.
6. Responding parties are best situated to evaluate the procedures, methodologies, and technologies appropriate for preserving and producing their own electronically stored information.
7. The requesting party has the burden on a motion to compel to show that the responding party’s steps to preserve and produce relevant electronically stored information were inadequate.
8. The primary source of electronically stored information for production should be active data and information. Resort to disaster recovery backup tapes and other sources of electronically stored information that are not reasonably accessible requires the requesting party to demonstrate need and relevance that outweigh the costs and burdens of retrieving and processing the electronically stored information from such sources, including the disruption of business and information management activities.
9. Absent a showing of special need and relevance, a responding party should not be required to preserve, review, or
produce deleted, shadowed, fragmented, or residual electronically stored information.
10. A responding party should follow reasonable procedures to protect privileges and objections in connection with the production of electronically stored information.
11. A responding party may satisfy its good faith obligation to preserve and produce relevant electronically stored information by using electronic tools and processes, such as data sampling, searching, or the use of selection criteria, to identify data reasonably likely to contain relevant information.
12. Absent party agreement or court order specifying the form or forms of production, production should be made in the form or forms in which the information is ordinarily maintained or in a reasonably usable form, taking into account the need to produce reasonably accessible metadata that will enable the receiving party to have the same ability to access, search, and display the information as the producing party where appropriate or necessary in light of the nature of the information and the needs of the case.
13. Absent a specific objection, party agreement or court order, the reasonable costs of retrieving and reviewing electronically stored information should be borne by the responding party, unless the information sought is not reasonably available to the responding party in the ordinary course of business. If the information sought is not reasonably available to the responding party in the ordinary course of business, then, absent special circumstances, the costs of retrieving and reviewing such electronic information may be shared by or shifted to the requesting party.
14. Sanctions, including spoliation ﬁndings, should be considered by the court only if it finds that there was a clear duty to preserve, a culpable failure to preserve and produce relevant electronically stored information, and a reasonable probability that the loss of the evidence has materially prejudiced the adverse party.